Taxes in Mississippi
Updated:
By: Lauren Hamer
Sr. Editor
Edited By: Jeff Smith
Sr. Content Manager
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At 7%, Mississippi’s sales taxes are the second-highest in the nation (California levies a 7.5% fee). But low property taxes help balance the burden. Below, we explain various Mississippi state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
Mississippi Tax Rates
| State Sales Tax | 7% |
| Avg State/Local Sales Tax | 7.07% |
| Gas Tax | $0.22 per gallon |
| Diesel Tax | $0.22 per gallon |
| Cigarette Tax | $0.17 per pack |
| Income Tax | 4.95% |
| Effective Tax Rate: | 4.50% |
| Property Tax | 0.97% |
| Social Security Tax | Partial |
| Medical/Dental Deduction: | Yes |
| Federal Income Tax Deduction: | Yes |
| Retirement Tax | Partial |
Mississippi State Taxes Explained
Mississippi Sales Tax
7%. Only two localities, Jackson (1%) and Tupelo (0.25%), add an additional fee. Groceries are taxed, but prescribed medications and some medical devices are exempt. Vehicles are taxed at 5%.
Hospital care, in-home care and most other medical bills are not taxed, but wellness centers, clinics and physicians’ offices likely have to charge sales tax. There is no sales tax on residential utilities like electricity.
Mississippi Income Taxes
Max rate of 5% (on taxable income over $10,000). This threshold will be reduced to 4.7% in 2024, 4.4% in 2025, and 4% in 2026.
Mississippi Property Taxes
Property and automobiles are both subject to ad valorem taxes in Mississippi. This tax is assessed based on the value of the property. The average real estate tax rate is 0.81%, which amounts to $958 on the median home value of $119,000.
Single-family residential property is taxed at 10% of its assessed value. All other personal property except for motor vehicles is assessed at 15% of its value. Motor vehicles are taxed at 30%.
Mississippi offers a Homestead Exemption to eligible taxpayers, with a $300 maximum exemption for homeowners under age 65. Homeowners 65 years of age or older or who are totally disabled get an exemption on the first $75,000 of true value.
Mississippi Retirement Taxes
Mississippi does not tax retirement income from qualified plans, such as IRAs, 401(k) plans, public and private pensions and others. Social Security is not taxed, regardless of total income.
Mississippi Estate and Inheritance Taxes
No estate or inheritance tax.
For additional information, see the Mississippi Department of Revenue website.