On Thursday, Gov. Tate Reeves signed a bill to overhaul Mississippi’s tax system into law. The income tax will be eliminated in about 14 years. Many lawmakers inadvertently voted for it because of typos. It is the law.
The bill also trimmed grocery tax and raised gasoline taxes.
Mississippi is on a path to becoming the first state to eliminate an existing state income tax when it is phased out in about 14 years.
Reeves said the law marks a turning point in the state’s history and would make Mississippi a magnet for corporate investment and workers from other states.
“Today is a day that will be remembered not just for the headlines, not just for the politics, but for the profound generational change it represents,” Reeves said at a bill signing ceremony in front of the Governor’s Mansion. “I must say, it feels like it’s been a long time coming, but after many, many, many years of hard work, we can all stand together and say that we have accomplished income tax elimination in the state of Mississippi.”
Typo Tax Bill
Mississippi is reducing its income tax rate to 4% from a previously passed tax cut being phased in. Beginning in 2027, the new law will reduce that rate by .25% over four years until it reaches 3%. In 2031, the tax will only be reduced if certain revenue “growth triggers” are met.
The law also reduces the sales tax on groceries from 7% to 5%, raises the gasoline tax from 18.4 cents a gallon to 27.4 cents a gallon over three years to fund infrastructure, and changes the contribution model of the public employee retirement system.
The Senate wanted a longer-term approach. The House bill with typos had the shorter-term plan with several growth triggers eliminated.
The errors were acknowledged.
“Some of y’all are focused on a typo in the bill, and I’d use the biblical analogy, let he who has not had a typo cast the first stone,” Lt. Gov. Delbert Hosemann said.
Mississippi relies on federal government funding, and some are worried about the loss of revenue.
Gov. Tate Reeves said the benefits would outweigh the costs: “We are saying to entrepreneurs, to workers, to dreamers: Mississippi is open for business, and we will not penalize your success. We are going to compete, and we are going to win.”
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