Mississippi — Sales & Use Tax

Mississippi imposes a 7% sales tax on the gross proceeds of retail sales of tangible personal property within the state. The tax applies to every person engaging or continuing in the business of selling tangible personal property in Mississippi unless the law provides an exemption or reduced rate for specific items. Tangible personal property includes electricity, water, gas, steam, pre-written software, and digital and electronic goods, but excludes real estate, bank accounts, stocks, bonds, mortgages, and insurance certificates or policies.

The tax base is either the gross proceeds of sales or the gross income of the business, depending on the type of business activity. Certain transactions are subject to reduced rates or exemptions as specified in the Mississippi Sales Tax Law (Title 27, Chapter 65, Mississippi Code).

Source: Miss. Code § 27-65-17, Mississippi Department of Revenue — Sales and Use Taxes, Mississippi Department of Revenue — Sales Tax FAQs

Mississippi requires out-of-state businesses without physical presence to register and collect use tax if their sales into the state exceed $250,000 over any twelve-month period. This economic presence standard became effective July 1, 2018, and applies to businesses purposefully or systematically exploiting the Mississippi market. The threshold is sales-based only; Mississippi does not impose a separate transaction-count requirement.

Source: Miss. Code § 27-67-3, Mississippi DOR Business Tax FAQs

Mississippi sales and use tax returns are due on or before the 20th day of the month following the end of the reporting period. When the 20th falls on a weekend or holiday, returns and payments filed online or postmarked by the first working day after the due date are considered timely. The Mississippi Department of Revenue assigns each taxpayer's filing frequency—annual, quarterly, or monthly—based on sales volume.

Source: Miss. DOR Sales and Use Taxes, Miss. DOR Reporting Requirements

Mississippi requires marketplace facilitators to collect and remit sales and use tax on behalf of marketplace sellers for sales facilitated through their platforms, effective July 1, 2020. A marketplace facilitator is defined as any person who lists or advertises tangible personal property, services, or digital goods for sale and collects payment from customers. The collection requirement applies when the facilitator's sales into Mississippi exceed $250,000 in any consecutive twelve-month period. Third-party food delivery services delivering from unrelated restaurants are excluded.

Source: Miss. Code § 27-67-3 & § 27-67-11 (HB 379, 2020), Mississippi DOR Notice to Marketplace Facilitators

Mississippi organizes sales tax exemptions into five statutory categories codified in Miss. Code §§ 27-65-101 through 27-65-111: industrial, agricultural, governmental, utilities, and "other" exemptions. An exemption from sales tax must be specifically provided by law; the Mississippi Department of Revenue does not recognize exemptions based on general business purpose or equity. The exemptions provided in these sections are proper deductions when included as part of gross sales reported and when supported by adequate invoices and records.

Industrial exemptions (§ 27-65-101) cover sales of component materials, machinery, and equipment to manufacturers, technology-intensive enterprises, and data/information enterprises certified by the Department of Revenue. Full exemptions apply to qualified manufacturers in Tier Three areas (as designated under Miss. Code § 57-73-21) for component materials used in facility construction and for manufacturing machinery and equipment purchased within three months of the initial start-up date. Partial exemptions (50% of the tax) apply to similar purchases in Tier One and Tier Two areas. Industrial exemptions do not apply to the 3.5% contractor's tax levied under Miss. Code § 27-65-21.

Agricultural exemptions (§ 27-65-103) include sales of seeds, fertilizers, pesticides, feed, farm machinery and equipment, and supplies used directly in crop or livestock production. Sales of cotton, cottonseed, and soybeans in their original condition are exempt, as are sales of bagging and ties for cotton, hay baling wire and twine, and containers used in growing or preparing agricultural products for market. Sales of ice to commercial fishermen purchased for use in seafood preservation are exempt. Sales of farm products (other than ornamental plants) by the producer are exempt except when sold through an established place of business.

Governmental exemptions (§ 27-65-105) exempt sales to the United States Government, the State of Mississippi, its departments and institutions, counties, and municipalities. The exemption does not apply to sales to national banks. Sales to the Mississippi Band of Choctaw Indians are exempt. Sales to schools supported wholly or in part with funds provided by the State of Mississippi are exempt; the exemption does not apply to property that is not to be used in the ordinary operation of the school or that is to be resold to students or the public.

"Other" exemptions (§ 27-65-111) comprise a detailed statutory list including (among many others):

• Sales to nonprofit hospitals and infirmaries owned and operated by a corporation or association with no net earnings inuring to any private shareholder (limited to property ordinary and necessary to operations);
• Daily and weekly newspapers and subscription sales of all magazines;
• Prescription drugs and medicines;
• Sales to elementary and secondary schools, junior and senior colleges owned and operated by a nonprofit corporation exempt from state income taxation (limited to property used in ordinary operations, not for resale);
• Sales to YMCAs, YWCAs, Boys & Girls Clubs owned and operated by a nonprofit corporation;
• Sales of tangible personal property for immediate export to a foreign country;
• Retail sales of food for human consumption purchased with food stamps issued by the USDA;
• A sales tax holiday for clothing, footwear, and school supplies under $100 per item (the holiday period and items covered are specified in § 27-65-111(ab)).

This is a partial list; § 27-65-111 contains additional exemptions for specific nonprofit organizations, certain technology and economic development entities, and other transactions. No exemption provided in §§ 27-65-101 through 27-65-111 applies to the contractor's tax levied by § 27-65-21.

Resale exemption. Mississippi does not issue a separate resale certificate form. Registered retailers purchasing tangible personal property for resale in the ordinary course of business must provide their Mississippi sales tax permit number to the vendor at the time of purchase. The sales tax permit number serves as the resale exemption certificate. The Department of Revenue states that vendors must maintain adequate invoices and records to support exempt sales; the specific documentation and verification requirements are set by the Department's regulations and audit practices.

Entity-based exemptions (nonprofit organizations, government agencies, schools) require the purchaser to provide documentation of the entity's exempt status and the statutory exemption basis. The Department of Revenue publishes specific forms for certain exemptions, including utility exemption affidavits for qualifying entities. Vendors accepting an exemption certificate are responsible for verifying that the exemption claimed is valid and that the purchase falls within the exemption's scope.

Source: Mississippi Department of Revenue — Sales Tax Exemptions

Mississippi imposes very limited local sales taxation compared to most states. Only two municipalities levy a local general sales tax on top of the 7% state base rate: the City of Jackson and the City of Tupelo. Mississippi imposes no county-level sales taxes.

Jackson 1% special infrastructure tax. The City of Jackson levies a 1% special infrastructure tax on certain retail sales and services performed within the corporate limits, effective March 1, 2014. The tax applies to sales of tangible personal property taxed at 7% or higher under Mississippi sales tax law and to taxable services performed at a location in Jackson under Miss. Code Ann. § 27-65-23. The Jackson tax has numerous statutory exclusions detailed in Mississippi Department of Revenue Notice 72-14-2. As initially enacted, the Jackson tax applied both to sales made from a Jackson location and to deliveries into Jackson; effective April 24, 2014, the Mississippi Legislature removed the delivery-into component under HB 787. After April 24, 2014, the tax applies only to sales of tangible personal property made from a business location within Jackson city limits, regardless of where the goods are delivered in Mississippi. Services performed at a location in Jackson remain subject to the 1% tax even if the service provider is not physically located in Jackson; services performed outside Jackson city limits by a provider physically located in Jackson are not subject to the tax.

Tupelo 0.25% water procurement facility tax. The City of Tupelo levies a 0.25% tax on all retail sales and services provided within the corporate limits that are subject to the general 7% state sales tax rate. The tax applies to all retail sales made from taxpayers within the Tupelo corporate limits and services provided within those limits. This tax is in addition to all other taxes imposed.

Location-based application for in-state sellers. For sellers with a physical business location in Mississippi, the applicable local tax is determined by the location from which the sale is made. A retailer located in Jackson collects the combined 8% rate (7% state + 1% Jackson infrastructure tax) on sales of tangible personal property made from that Jackson location, regardless of the delivery destination within Mississippi. A retailer located in Tupelo collects the combined 7.25% rate (7% state + 0.25% Tupelo) on sales from that location. A retailer located elsewhere in Mississippi collects only the 7% state rate. The Jackson notice explicitly provides that businesses located in Jackson collect the 1% tax on "all sales of tangible personal property regardless of the point of delivery in Mississippi."

Application for remote sellers. Remote sellers without a physical location in Mississippi but meeting the economic nexus threshold ($250,000 in sales into Mississippi over any twelve-month period) are required to collect and remit Mississippi sales and use tax. The Mississippi Department of Revenue has not published comprehensive sourcing rules for remote sellers' application of local taxes. Industry practice applies destination-based sourcing (based on the customer's delivery address), but practitioners should confirm the Department's current guidance for remote seller local-tax collection obligations.

Tourism and economic development taxes. Many Mississippi municipalities impose separate tourism, convention, and economic development taxes on restaurants, hotels, prepared food, and alcoholic beverages. These special-purpose taxes are narrow in scope—typically limited to hospitality and lodging transactions—and are administered separately from the general sales tax. The Jackson Convention and Visitors Bureau Tax, for example, imposes a 1% tax on gross proceeds of sales of restaurants, hotels, and motels (effective May 1, 1999, scheduled to repeal July 1, 2026). These tourism taxes are not general sales taxes and do not apply to most retail transactions.

No county-level taxes. Mississippi law does not authorize counties to levy local sales taxes. All local sales taxes in Mississippi are municipal taxes authorized by specific state legislation for individual cities.

Source: Mississippi DOR Business Tax FAQs, Mississippi DOR Notice on Jackson One Percent Special Sales Tax (Notice 72-14-2), Mississippi DOR Tupelo Water Procurement Facility Tax, Mississippi DOR Jackson Convention and Visitors Bureau Tax