JACKSON, Miss. (AP) — Mississippi would phase out its income tax, reduce the sales tax on groceries and set a higher sales tax rate on many other items, under a bill that advanced Wednesday through the state House.
“The bill this year is much simpler, easier to understand, and I would say to you an improved product over the bill that passed overwhelmingly in this body last year,” Ways and Means Committee Chairman Trey Lamar, a Republican from Senatobia, said during House debate.
This year’s bill also faces an uncertain fate in the Senate. Republican Lt. Gov. Delbert Hosemann has said he wants legislators to cut taxes, but he has not released a proposal.
Republican House Speaker Philip Gunn said eliminating the income tax is his priority this legislative session because he believes the change will make Mississippi more competitive with states such as Texas, Florida and Tennessee that don’t tax income.
The House bill would reduce the grocery tax from 7% to 4%. The change would phase in over six years, starting this July.
The bill also would increase several taxes from 7% to 8.5% — an increase of more than 21% in that rate. That would include the general sales tax; the sales tax on alcohol; and the tax on music, games, cellphone ring tones and other products delivered electronically.
If the general sales tax were to increase by the proposed amount, for example, a person buying $100 of clothing would pay $8.50 in sales tax rather than the current $7. The increased tax amount would apply to in-person or online purchases.