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This Mississippi sales tax guide for 2026 is written for business owners and CPA firms who collect, file or review Mississippi returns. The headline rate is still 7%, and Mississippi has very little local sales tax. The biggest recent change is on groceries: since July 1, 2025, most food sold at grocery stores is taxed at 5%, not 7%. Every rate, threshold and deadline below was checked against the Mississippi Department of Revenue (DOR) in October 2026.
Mississippi's combined state and local rate averages 7.06%, 23rd in the country, according to the Tax Foundation's January 2026 table. The state carries almost all of that, which makes Mississippi simpler to administer than neighbors with deep local layers, such as Alabama and Tennessee.
Mississippi law taxes all retail sales of tangible personal property at 7% unless a statute exempts the item or sets a lower rate. The DOR sales tax rate table lists the reduced rates. The ones most businesses run into are below.
| Category | Rate (2026) | Notes |
|---|---|---|
| General retail sales of tangible personal property | 7% | Default rate; also applies to many taxable services |
| Groceries (SNAP-eligible food and drink not bought with SNAP) | 5% | Reduced from 7% on July 1, 2025 |
| Automobiles and light trucks (10,000 lbs or less) | 5% | Same rate applies for use tax on imported vehicles |
| Trucks over 10,000 lbs, aircraft, mobile and modular homes | 3% | Also certain publicly owned coliseum admissions |
| Farm tractors, farm implements, logging equipment, manufacturing machinery | 1.5% | Machinery must qualify under the statute |
| Contractor's tax on nonresidential contracts over $10,000 | 3.5% | Paid on the total contract price |
| Residential electricity and fuels, residential water | 0% | Industrial electricity and fuels also 0% |
Mississippi treats pre-written software and digital goods as tangible personal property, so they fall under the 7% rate. Custom software, software maintenance contracts and web page design are also taxable, according to the DOR business tax FAQ. If you sell software into several states, our piece on whether SaaS is taxable and where compares the main approaches.
The Build Up Mississippi Act (House Bill 1, 2025) cut the rate on groceries from 7% to 5% for sales on or after July 1, 2025. DOR defines groceries as food and drink for human consumption that is eligible for purchase with SNAP benefits but is not actually bought with them. Purchases paid with SNAP remain fully exempt.
Items outside the SNAP definition stay at 7%. That includes hot prepared food, alcoholic beverages and non-food items sold in a grocery store, such as paper goods and cleaning supplies. The July 2025 return, due August 20, 2025, was the first to use the new rate. On the return, in-state retailers report grocery sales under a separate rate code from general sales, and out-of-state sellers do the same on the seller's use tax return.
A worked example: a grocer outside Jackson and Tupelo rings up $200 of SNAP-eligible food paid by card and $300 of general merchandise. Tax is $10 on the food (5%) plus $21 on the merchandise (7%), or $31 in total. A register that still applies 7% to everything would collect $35, and the $4 over-collection belongs to the customer or the state.
Mississippi has only two city-level general sales taxes and none at the county level, according to DOR:
Separately, many cities and counties impose tourism and economic development taxes, typically on hotels, motels, restaurants and bars. These are not general sales taxes, but they are collected and reported on the same return. A restaurant in a tourism-tax city can owe 7% state tax plus one or more local levies on the same meal. DOR publishes a list of tourism and economic development taxes by city and county. Because these taxes depend on where the sale takes place, the rules in our guide to destination-based and origin-based sourcing are worth reviewing if you deliver from one location to many.
Any business with a location in Mississippi that makes retail sales must register. So must out-of-state businesses that operate a place of business in the state.
For remote sellers, Mississippi uses an economic nexus test. An out-of-state business whose sales into Mississippi exceed $250,000 in any 12-month period has substantial economic presence and must register to collect and remit tax. DOR dates this rule to July 1, 2018. Remote sellers collect what Mississippi calls seller's use tax, at the same rates as sales tax.
Since July 1, 2020, marketplace facilitators that meet the same $250,000 threshold must collect on sales they facilitate. Sales made through a facilitator count toward the facilitator's total, so a seller with both marketplace and direct sales should test the direct sales on their own. Our article on economic nexus for growing businesses explains how to track thresholds across states, and our multi-state sales tax workflow for CPA firms shows how firms organize the monitoring.
Registration is online through DOR's Taxpayer Access Point (TAP). Points to know before you apply:
If you have been selling into Mississippi without a permit, register before DOR contacts you. Our explainer on sales tax voluntary disclosure agreements covers how VDAs limit look-back periods and penalties.
Mississippi taxes more services than many people expect. DOR lists pest control, plumbing, electrical work, heating and air conditioning work, computer software services, dry cleaning and parking lots as taxable. Landscaping (planting, sod, earth moving) is taxable, but mowing, trimming and weeding are not. Labor to install tangible personal property is generally taxable along with the property.
Delivery, shipping and handling charges connected with a sale of tangible personal property are part of gross proceeds and taxable. The same rule applies on the use tax side when you buy from an out-of-state vendor.
An exemption must be specifically provided by law, and the DOR exemptions list is long. The ones that come up most often:
Nonprofits are a common trap. Mississippi has no general exemption for 501(c)(3) organizations. Only the specific types named in the statute qualify, such as nonprofit hospitals and certain nonprofit schools, and the purchase must relate to their exempt operations.
A business can buy inventory for resale tax-free by giving the supplier its Mississippi sales tax permit information. The seller keeps that permit number on file with a description of the items and the amount. DOR does not accept or use blanket certificates. Valid documentation is a sales tax or seller's use tax permit, a Material Purchase Certificate (for qualified construction projects), a Direct Pay Permit or a letter ruling. We compare the documents in resale certificate vs sales tax permit, and our page on managing sales tax exemptions and resale certificates covers record-keeping across states.
Inventory bought tax-free and then used by the business or its owners is subject to use tax on its cost.
Under DOR's reporting requirements, filing frequency depends on how much tax you remit in a year:
| Annual tax remitted | Filing frequency |
|---|---|
| Less than $600 | Annual |
| $600 to $3,599 | Quarterly |
| More than $3,599 | Monthly |
Returns are due on or before the 20th day after the end of the reporting period, moving to the next business day when the 20th falls on a weekend or holiday. You must file for every period your account is active, even with no sales. Online filing through TAP is mandatory if you report more than four tax rates, have more than one location or account, or owe certain other levies such as tourism or city utility taxes. In TAP, filing the return and paying the tax are two separate steps.
Timely filers can keep a 2% vendor discount, capped at $50 per reporting period and $600 per calendar year. A monthly filer with $4,000 of tax would calculate $80 at 2% but keep only $50. File or pay late and DOR recalculates the discount to zero for all locations.
DOR's sales tax FAQ states that deficient or delinquent tax due to negligence or failure to comply can draw a 10% penalty, interest at 0.5% a month from the due date, or both. Interest starts the month after the due date, and the penalty applies immediately.
Keep records for at least four years. DOR expects beginning and ending inventories, purchase and sales records, invoices and bills of lading, plus support for every exemption or reduced rate claimed. Sales without adequate support are taxed at 7% with penalty and interest. If an audit notice does arrive, our checklist for handling a sales tax audit covers the document request and sampling stages.
Use tax applies to property bought for use in Mississippi when sales tax was not paid at an equal or higher rate. Rates match the sales tax rates. The tax base includes freight, installation and service charges to the point of use.
Mississippi gives credit for sales or use tax paid to another state, with one large exception: there is no credit for automobiles, trucks, trailers, boats, motorcycles and similar vehicles imported and first used in Mississippi. For business equipment previously used in another state, the base is cost less straight-line depreciation, never below 20% of cost. Use tax goes on the same periodic return as sales tax.
Mississippi held two holidays in 2026:
Our page on 2026 sales tax holiday rules compares Mississippi with other states. For neighboring-state rules, see our Alabama sales tax guide.
Yes, at a reduced rate. Groceries that qualify under the SNAP definition are taxed at 5%, prepared hot food and alcohol stay at 7%, and purchases actually paid with SNAP benefits are exempt.
No. Only Jackson (1% on certain sales) and Tupelo (0.25%) levy general local sales taxes. Many cities and counties do levy tourism and economic development taxes on restaurants, bars and lodging, so hospitality businesses must check their location.
Yes, once sales into Mississippi exceed $250,000 in any 12-month period. They register through TAP and collect seller's use tax at the same rates that in-state retailers charge.
File final returns for the last period you made sales, pay any balance, and notify DOR in writing or through your TAP account that the business or location has closed. A permit is tied to one business at one location, so a move needs a new permit rather than an update.
No. The permit only covers items bought for resale. Equipment, supplies and inventory you pull for your own use are taxable, and if the vendor did not charge Mississippi tax you owe use tax on your return.
Multi-rate grocery returns, Jackson and tourism levies, and remote-seller thresholds are where most Mississippi errors happen. Contact Madras Accountancy for help with registration, monthly filings or a review of past returns. If you compare tools first, our review of sales tax automation software covers the main options.
The section 4960 excise tax is 21% of nonprofit pay over $1M. From 2026 it covers all employees. See the medical carve-outs, Form 4720 and a worked example.
The paid family and medical leave tax credit is permanent from 2026. See the 12.5% to 25% rates, the premium option, the 6-month rule and how Form 8994 works.
Opportunity zones become permanent in 2027 under the One Big Beautiful Bill. See the new deferral, rural bonus, and the 2026 handoff.
