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NFIB Applauds Mississippi Legislature for Passing House Bill 1, Phasing Out State Income Tax

NFIB Applauds Mississippi Legislature for Passing House Bill 1, Phasing Out State Income Tax

March 20, 2025

The sales tax will be reduced gradually and eliminated by 2037

NFIB State Director Leah Long applauded the Mississippi Legislature for passing House Bill 1, a historic measure that will phase out the state income tax. The measure passed the House today by a vote of 92-27. It cleared the state Senate on Tuesday.

“This is great news for Main Street businesses,” Long said. “Most small businesses in the state are structured as pass-through entities, meaning the revenue passes through the business to the owners, who pay taxes at the individual rate. Eliminating the state income tax will allow small business owners to reinvest more revenue into their businesses, create jobs, and support their communities.”

Under the legislation, the state income tax will decrease from the current 4% to 3% beginning in 2027. The rate will be reduced by 0.3% a year over the following decade before it’s eliminated in 2037.

Long said NFIB members were strongly in favor of eliminating the state income but didn’t take a position on other provisions, which include a reduction in the sales tax on groceries, adjustments to the fuel tax revenue allocation, and directing that lottery proceeds toward infrastructure and education.

“We’re grateful to the Legislature for passing this important tax reform, which will help Mississippi’s small businesses grow and thrive,” Long said. “We urge Governor Reeves to sign this bill into law and make Mississippi an even better place to own and operate a small business.”

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