All businesses in Mississippi are subject to taxes within the state. These taxes fall into four basic tax types:
Actual state tax requirements vary widely depending upon corporate structure and activities, but the following information is provided as a broad guideline to identify existing tax levies along with possible incentives available to reduce tax liabilities.
Mississippi levies a tax on individual income in the state, as required in Section 27-7-5 of the Mississippi Code. Income tax is assessed at the same rate for individuals as it is for business entities. Employers are statutorily required to withhold Mississippi personal income tax from its employees and remit these withholdings directly to the Mississippi State Tax Commission. This tax is a deduction from the employee’s wages, and does not require a contribution from the employer. Specific registration, withholding, and filing requirements can be obtained from the Mississippi State Tax Commission.
Mississippi levies an unemployment compensation tax on the first $7,000 of an employee’s annual wages, as provided for in Section 71-5-1 of the Mississippi Code. The maximum contribution rate for employers is 5.4%, with the minimum rate equaling 0.9%. Both the state minimum rate and the business’s rate vary from year to year. 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. Rates are recalculated each October and apply to the following year’s wages. Rates are adjusted after two to three years of Mississippi filings, depending upon what time of year the employer begins reporting.
In addition to the tax credits and exemptions listed above, there are also additional programs that provide cash rebates back to eligible companies.
For further details, see the Mississippi Tax Incentives, Exemptions, and Credits on the State Tax Commission’s website www.dor.ms.gov, or contact the State Tax Commission at 601.923.7044 or the MDA Financial Resources Division at email@example.com or 601.359.3552.