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Mississippi

The Facts on Mississippi's Tax Climate

Last updated July 1, 2009

Here are some basic facts on Mississippi's tax system and how it compares to other states:

Tax Freedom Day Arrives on March 28 in Mississippi
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Mississippi taxpayers had to work until March 28 to pay their total tax bill, ranking the state 48th nationally. That's 16 days earlier than national Tax Freedom Day (April 13). The Tax Freedom Days of neighboring states are: Louisiana, March 28 (ranked 49th nationally); Arkansas, April 4 (ranked 37th nationally); Tennessee, April 5 (ranked 36th nationally); and Alabama, April 2 (ranked 44th nationally).
Full study of Tax Freedom Day, nationwide and in each state

Mississippi's State/Local Tax Burden Below National Average
Estimated at 8.9% of income, Mississippi's state/local tax burden percentage ranks 36th highest, below the national average of 9.7%. Taxpayers in Mississippi pay $2,834 per capita in state and local taxes.
Mississippi's State and Local Tax Burdens, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

Mississippi's 2010 Business Tax Climate Ranks 21st
Mississippi ranks 21st in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Louisiana (35th), Arkansas (40th), Tennessee (22nd) and Alabama (19th).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)

Mississippi's Individual Income Tax System
Mississippi's personal income tax system consists of three separate brackets with a top rate of 5% kicking in at an income level of $10,000. That top rate ranks 30th highest among states levying an individual income tax. Mississippi's 2006 individual income tax collections were $433 per person, which ranked 41st highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita 

Mississippi's Corporate Income Tax System
Mississippi's corporate tax structure consists of three brackets and a top rate of 5% kicking in at a corporate income level of $10,000. Among states levying corporate income taxes, Mississippi's rate ranks 40th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) were $127 per capita, which ranked 35th nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita 

Mississippi Levies Sales Tax above National Median; Gasoline and Cigarette Taxes among the Lowest in the Nation
Mississippi levies a 7% general sales or use tax on consumers, above the national median of 6. State and local governments combined collected approximately $1,051 per capita in sales taxes in 2006, which ranks 14th highest nationally. Mississippi's gasoline tax stands at 18.8 cents per gallon, ranking 42nd highest nationally. Mississippi's cigarette tax stands at 68 cents per pack of twenty, which ranks 36th highest in the nation. The sales tax was adopted in 1930, the gasoline tax in 1922 and the cigarette tax in 1932.
50-State Table of Sales and Excise Tax Rates
50-State Table of  State and Local General Sales Tax Collections Per Capita and Per Household
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita

Mississippi Property Taxes: Comparatively Low
Mississippi is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Mississippi's localities collected $ 700.52 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Mississippi collected $15.40 per capita during FY 2006, making its combined state/local property taxes $ 715.93 per capita, which ranked 41st nationally..
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Mississippi is a Beneficiary State
Mississippi taxpayers receive more federal funding per dollar of federal taxes paid compared to the average state. Per dollar of federal tax collected in 2004, Mississippi citizens received approximately $2.02 in the way of federal spending. This ranks the state 2nd highest nationally, and represents a increase from 1995, when Mississippi received $1.54 per dollar of taxes in federal spending and was 3rd highest nationally. Neighboring states and the amount of federal spending they received per dollar of federal taxes paid were: Louisiana ($1.78), Arkansas ($1.41), Tennessee ($1.27), and Alabama ($1.66).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Tax Data from The Tax Foundation