Mississippi Corporate Tax Rate: Everything You Need To Know
The Mississippi corporate tax rate is changing which is 3 percent for the first $5,000, 4 percent for the next $5,000, and 5 percent on anything beyond $10,000.4 min read
The Mississippi corporate tax rate is changing. Currently, the corporate income tax rates are 3 percent for the first $5,000, 4 percent for the next $5,000, and 5 percent on anything beyond $10,000.
In general, Mississippi businesses are subject to four state taxes:
- Corporate income tax.
- Franchise tax.
- Sales and use tax.
- Property tax.
For businesses and corporations registered or doing business in Mississippi, the corporate income tax is levied on gross taxable income. Businesses include those with a sales tax nexus — that is, a presence in the state. The bracketed tax system is applied similarly to personal income tax, requiring the filing of an annual tax return. Deductions for businesses include wages, cost of goods sold, and additional allowable business expenses.
Generally, registered businesses such as sole proprietorships, partnerships, and S corporations are considered flow-through entities and are not subject to reporting income and paying both Mississippi and federal corporate income taxes on earnings.
C corporations are the most common business structures subject to corporate taxation. Because these types of organizations are taxed on revenue as well as through personal income tax paid by shareholders and company owners, C corporation profits are effectively taxed twice, known as double taxation.
Other State Taxes
A state unemployment compensation tax is levied on the first $7,000 of an employee's annual wages, with a maximum rate of 5.4 percent. Minimum rates vary while maintaining a 1.2 percent floor.
Personal income tax/individual income tax rates are the same as corporate income:
- $0 - $5,000 at 3 percent.
- $5,000 - $10,000 at 4 percent.
- $10,000+ at 5 percent.
Mississippi levies a single statewide sales tax of 7 percent on sales of tangible personal property. Taxable services include air conditioning installation/repair, car washing, etc.
Tangible personal property includes physical goods such as furniture, clothing, and electronics. The state taxes all food at the full sales tax rate. Prescription drugs are sales tax exempt.