Not only is Mississippi famed for being the origin state of root beer and Blues, but it’s also regarded as one of the most tax-friendly states in the U.S. However, likeable tax laws doesn’t necessarily mean that filing Mississippi state taxes is going to be a no-brainer. Thankfully, our Mississippi state tax calculator is a simple, accurate way to calculate your tax liabilities in the Magnolia state.

Need more help navigating Mississippi state tax laws? Our tax professionals are here to help you digest complex state tax code, file in compliance, and save as much as possible on your annual federal and state tax returns.

In this overview of Mississippi state taxes, we’ll discuss how taxes are structured in the Magnolia state, which items are subject to taxes, what’s considered tax exempt, and show you how you can file your state taxes in compliance with the Mississippi Department of Revenue. But before we do all that, let’s establish some basic tax knowledge first.

Each state in the U.S. has their own government agency that establishes how taxes are imposed on residents. Residents’ state tax dues are calculated when they file their state tax return, and then paid directly to the state’s respective tax agency. But these dues only account for a portion of the taxpayer’s overall tax liability.

In addition to state taxes, U.S. taxpayers are subject to pay federal taxes which are imposed by the IRS. Federal taxes are filed separately from state taxes using applicable federal tax forms.

Mississippi taxes are generally considered favorable for taxpayers when compared to other states, but for the most part, the state imposes taxes on the same things as other state governments in the U.S. If you’re wondering “how much is Mississippi state tax?”, we’ll need to discuss the state’s rules on income taxes, sales taxes, property taxes, and other miscellaneous taxes you may encounter. We’ll cover each of these topics in detail below, but first, here are some quick facts:

Mississippi uses a graduated income tax bracket system which means tax rates are structured according to income. The higher income Mississippi taxpayers bring in annually, the higher they’re taxed on it.

Mississippi state income taxes are calculated on an individual basis, so if you’re married filing jointly, you’ll first calculate your tax liabilities separately and then add the totals together. Let’s take a look at an example provided by the Mississippi Department of Revenue.

John is filing as a single taxpayer in Mississippi. His annual taxable income is $23,000. Using the above graduated tax rates, let’s determine his state tax liability:

$1,000 X 0% = $0
$4,000 X 3% = $120
$5,000 X 4% = $200
$13,000 X 5% = $650

Now that all of John’s income has been taxed according to the state’s respective rates, we’ll add the results together to estimate what John owes the state of Mississippi in income taxes.

$0 + 120 + 200 + 650 = $970
John’s total state tax liability is $970.

Now let’s say John marries Mary who has a taxable income rate of $20,000. Let’s calculate John and Mary’s combined tax liability.

$1,000 + $1,000 = $2,000 X 0% = $0
​$4,000 + $4,000 = $8,000 X 3% = $240
$5,000 + $5,000 = $10,000 X 4% = $400
​$13,000 + $10,000 = $23,000 X 5% = $1,150
$0 + 240 + 400 + 1,150 = $1,790​
After combining both John and Mary’s state tax liabilities, we find their total taxes owed are $1,790.

Self-employment income is taxed the same as traditional income as far as state taxes go in Mississippi. However, self-employed individuals in the U.S. are responsible for paying federal taxes on their self-employment income since taxes are not withheld from their paychecks.

The federal tax on self-employment income, also known as SE tax, is 15.3% which includes both Medicare and Social Security tax contributions.

As we discussed before, Mississippi uses a graduated system to structure their state taxes. The rates range from 0%-5% and are based on the taxpayers’ gross income (AGI).

Mississippi taxpayers keep in mind: personal income tax is only a portion of your state tax liability. In addition to your income taxes, you’re also responsible for a number of other state taxes including sales taxes, property taxes, and other applicable taxes.

And on top of state tax liability, let’s not forget about your federal tax liabilities.

Capital gains in Mississippi are taxed at 5%, which is the same as the highest income tax rate in the state. Capital gains are similar to income tax as they’re a tax that’s levied on money that’s being brought in, but rather than earning it with a paycheck, capital gains are monies earned through the sale of an asset. Assets that may trigger a capital gains tax include the sale of a business, stock, property, or collectible item.

Mississippi's standard state sales tax rate is 7% but different items are taxed at different rates; sometimes lower or higher than the standard rate.

For example, manufacturing machinery sold in the state is taxed at a rate of 1.5% while food and beverages sold for use in vending machines are taxed at 8%.

In addition to Mississippi’s state sales tax, taxpayers should note that individual counties in the state also have jurisdiction over their own additional sales tax rates. In other words, you may be paying more than the 7% state tax rates when you factor in county sales tax rates.

Excise taxes are a type of tax state governments can choose to impose on certain products or services. Excise taxes are generally charged to the manufacturer or vendor of the product, rather than the consumer. However, excise taxes are often included in the final price of the product in order to account for excise tax liabilities.

While excise taxes can be imposed on a number of different items, they’re most often associated with “sin taxes” which are taxes on items that are considered threatening to health or safety in the community. Common examples of sin taxes include tobacco, alcohol, and gambling.

In the state of Mississippi, each beverage is taxed at a different rate depending on the type of alcohol it is. Below are the excise tax rates on alcohol in the state of Mississippi.

In addition to excise taxes on alcohol, the state of Mississippi also imposes a tax on tobacco sales. The excise tax rate is $0.34 per cigarette or $0.68 per pack of 20 cigarettes.

Mississippi charges a gas tax of $0.18 per gallon on all types of motor fuel, plus an extra $0.04 per gallon to support environmental protection measures.

State taxes don’t just impact individuals and local businesses, but they can also be imposed on large corporations like insurance companies. In Mississippi, the state charges a 3% tax on all premiums received by insurance companies that cover policies within the state. In addition, a 1% tax is added onto premiums that cover fire risk.

Like many other states, the state of Mississippi collects property taxes on a city and county level. This means that the rate you pay for owning property is determined by the area in which you live and the value of your property. These dues are then collected to support local measures such as road maintenance and county programs.

The median property tax in Mississippi is $508 per year based on the median home value in Mississippi, $98,000. Local governments in Mississippi collect an average of 0.52% in property taxes each year according to the property’s assessed value.

That said, certain counties may charge property taxes that are higher or lower than this rate. Madison County, for example, charges the highest property taxes in the state, collecting an average of 0.66% of a home’s value in property taxes (approximately $1,204 per year on average). Amite County, on the other hand, only levies an average of 0.39% of a home’s value in property taxes ($281 per year on average).

As of January 1, 2005, the state of Mississippi does not require estate taxes to be paid. Inheritance and estate taxes are levied when individuals inherit a certain amount of money following the death of a relative. If you received money or assets from an individual that passed away in Mississippi, you will not need to worry about paying these taxes, but if the deceased loved one died in a state where estate taxes are levied, you will need to follow the tax guidelines relative to that state

In an effort to save taxpayers money and support state initiatives, many states offer state tax credits. These credits cut a taxpayer’s tax bill dollar for dollar, unlike a tax deduction, which lowers taxable income.

Qualified state taxpayers in Mississippi can claim the following state tax credits:

• Broadband Technology Tax Credit
• Jobs Tax Credit
• Mississippi Equity Investment Tax Credit
• Skills Training Income Tax Credit

As we discussed before, tax deductions are another type of tax incentive that can help taxpayers save on their annual tax bill. Mississippi offers both standardized and itemized deductions.

If the value of itemized deductions outweighs the number listed as your standard deduction, you may choose to claim the deductions which you qualify for in order to save money on your tax return. The state of Mississippi offers a number of state tax deductions, here are a few examples of itemized deductions you may see on your annual tax return.

• IRA contributions
• Alimony paid
• Self-employed health insurance premiums

Now that you know more about how Mississippi state taxes work, it’s time to estimate your state tax liabilities, and more importantly, whether or not you qualify for a state tax refund.

Using our Mississippi state tax calculator, you can easily calculate your state tax responsibilities, budget for upcoming tax years, and determine how much money you’ll get back on your tax refund. To take advantage of our state tax calculator, just gather the following information:

• AGI
• Zip code
• Number of exemptions
• Number of dependents
• List of tax credits and deductions you qualify for

After you’ve finished estimating your tax dues and refund, use these tips to help you file your state taxes in compliance with state tax regulations.

• Once your employer sends your W-2, make sure to double-check all of the information to make sure your personal details and income are accurately reflected.
• To save money on your annual state taxes, review the deductions, credits, and tax exemptions that are offered in your state.

The state of Mississippi collects tax payments by credit card or e-check using their online tax payment system.

• The state of Mississippi has declared the sale of livestock tax-exempt.
• Mississippi ranks number 36 in the country for most favorable tax rates.
• 45.3% of tax revenue in Mississippi is generated from sales taxes.

Now that you have a solid understanding of Mississippi state taxes, you’re ready to file your annual return. But wait—the fun of tax season isn’t over just yet. In addition to your state taxes, you’re also responsible for paying federal taxes which are imposed and remitted by the Internal Revenue Service (IRS).

Since federal tax code applies to all taxpayers in the U.S. it’s generally easier to understand, but filing in compliance is still critical if you want to avoid potential complications with the IRS.

This information is current as of 2019. Taxpayers should consider special circumstances that may impact their individual state tax return.