Taxes and Business Costs

  • By locating in our area, an industry with at least 10 new employees will receive a 100% exemption on all state income and franchise taxes, full sales and use tax exemption, and property tax exemptions (other than school taxes) for up to 10 years.
  • Mississippi's corporate income tax rate's top bracket of 5% is 9th lowest in the United States.
  • You will receive 100% exemption of this tax for 10 years by locating in our area.
  • Kiplinger ranked Mississippi the 4th best tax-friendly state for business in August, 2014.
  • Mississippi has the 3rd lowest corporate unemployment tax rate for new employers in the United States
  • Mississippi is tied for the lowest maximum corporate unemployment tax rate for employers in the United States.
  • The Mississippi legislature passed massive workers' comp reform in 2012 to satisfy Mississippi businesses

State Taxes

Tax Rate
Corporate Income Tax First $5,000 of taxable income= 3%
Next $5,000 of taxable income= 4%
Remaining taxable income= 5%
Franchise Tax Franchise tax is a tax that is assessed on the company’s capital value. The capital value for the corporation is calculated based on:
- Capital stock issued and outstanding; and
- Paid-in Capital, Surplus and Retained Earnings, including deferred taxes, deferred gains, deferred income, contingent     liabilities and other true reserves.
- For multi-state corporations, capital is pro-rated and applied to the corporation’s total capital value to calculate the amount of capital to be apportioned to Mississippi. The apportioned capital is then multiplied by the franchise tax rate to determine the Mississippi franchise tax liability.
The franchise tax rate is $2.50 per $1,000 of Mississippi capital.

Sales & Use The regular retail sales and use tax rate on goods and services is 7%, but the law does allow for a reduced rate for manufacturing machinery, equipment, and industrial purposes of 1.5%. Sales tax on automobiles in Mississippi is 5%, with truck-tractors and semi-trailers taxed at 3%.

For commercial construction in Mississippi, there is a contractor’s tax assessed on the construction of commercial real property that is calculated as 3.5% of the contractor’s gross receipts from the construction. The contractor’s tax has no exemptions, and the contractor is allowed to purchase all component building materials exempt from sales tax.
Personal Income Tax First $5,000 of taxable income= 3%
Next $5,000 of taxable income= 4%
Remaining taxable income= 5%

Unemployment Tax Rate

Mississippi levies an unemployment compensation tax on the first $7,000 of an employee’s annual wages. The maximum contribution rate for employers is 5.4%, with the minimum rate equaling 0.9%. New employers in the state are assigned an initial rate of 2.7% of wages until the Mississippi Department of Employment Security can compute an actual experience rate for the employer.