Magnolia State News

The Mississippi Legislature has passed House Bill 1, a significant measure aimed at phasing out the state income tax. The bill received approval from the House with a vote of 92-27 after clearing the state Senate earlier this week.

NFIB State Director Leah Long expressed support for the legislation, stating, "This is great news for Main Street businesses." She explained that many small businesses in Mississippi operate as pass-through entities, where revenue passes through to owners who pay taxes at individual rates. By eliminating the state income tax, business owners will have more funds to reinvest in their operations and communities.

According to the bill, starting in 2027, the state income tax rate will decrease from 4% to 3%. It will then be reduced by 0.3% annually over ten years until it is fully eliminated by 2037.

Long noted that NFIB members were largely supportive of removing the state income tax but did not take a stance on other elements of the bill. These include reducing sales tax on groceries, adjusting fuel tax revenue allocation, and directing lottery proceeds towards infrastructure and education.

"We're grateful to the Legislature for passing this important tax reform," Long added. "We urge Governor Reeves to sign this bill into law and make Mississippi an even better place to own and operate a small business."