Taxes

Property Taxes

Counties and municipalities levy a property tax on real and tangible personal property. Most property is assessed at 15% of true value. Motor vehicles and utilities (excluding railroads) are assessed at 30% and owner-occupied residential properties at 10% of true value. Property is appraised and assessed by local assessors. Depreciation is allowed in determining true value. Tax rates are set by each city and the county based on local budget requirements.
Mississippi does not have a state property tax.

Property Tax Exemptions

Taxes are levied on real and tangible personal property. DeSoto County and the five municipalities may grant an exemption on real and personal property taxes, less the portions not eligible for exemption listed below, for a period of up to ten years. These exemptions are determined by the appropriate governmental entity.

Eligible enterprises include warehouses and/or distribution centers, manufacturers, processors, refineries, research facilities, regional and national headquarters, movie industry studios and air transportation and maintenance facilities.

In addition to the ad valorem tax exemptions, a company can take advantage of Mississippi’s Freeport Warehouse law, whereby manufacturers and distributors can be exempt from property taxes on finished goods stored in a licensed Freeport Warehouse that are shipped outside the state. This is a perpetual tax exemption.

Location Millage Rate per $1000 Exclusions Exempt Millage
DeSoto County* $98.70 Schools – 53.57 mills
Road & Bridge – 6.97 mills
Debt Service – 6.18 mills
General County Levy – 4 mills
$27.98
Hernando $31.75 Parks, Library, Bonded Indebtedness, Fire Protection – 17.64 mills $14.11
Horn Lake $46.00 Fire, Library, Debt Services – 14.26 mills $31.74
Olive Branch $38.50 Library, Parks, Public Safety – 23.75 mills $14.75
Southaven $43.73 Parks & Library – 26.46 mills $17.27
Town of Walls $28.00   $28.00

*DeSoto County tax rate as shown are an average. There are 80 taxing areas in the county and the rate varies by area. This ratio is a county average.

Land/Building, personal property and inventory are all assessed at 15% of true value

Note: For single family owner occupied homes, Mississippi has a Homestead Exemption (credit) available.

State Taxes

Mississippi businesses are subject to four basic state taxes: corporate income tax, franchise tax, sales and use tax, and property tax. Tax credits or exemptions are available on all base state taxes except for franchise tax.

Corporate Income Tax

All corporations engaged in business activities in Mississippi are taxed on net taxable income derived from those activities as follows:

First $ 5,000 3%
Next $ 5,000 4%
Over $10,000 5%

In the case of multi-state manufacturing corporations, net
business income from manufacturing which cannot be directly
assigned to the Mississippi operation is apportioned to the
State on the basis of a three-factor formulas:

  1. Ratio of property (book value) in Mississippi versus total property.
  2. Ratio of payroll in Mississippi compared to total payroll.
  3. Ratio of sales attributable to Mississippi compared to total sales. Additional non-business income is added to the apportioned income.

Mississippi allows a net operating loss to be carried over for the five years following the taxable year of such loss. The State, however, does not allow deductions of federal income taxes. There is no county or municipal income tax in Mississippi.

Corporate Franchise Tax

Mississippi’s franchise tax applies to most corporations doing business in the State. The rate is $2.50 per $1,000 of the value of the capital used, invested, or employed in the State. The tax base consists of capital stock issued and outstanding, surplus and undivided profits, and true reserves. However, the tax base cannot be less than the corporation’s assessed value of real and tangible personal property in Mississippi.

For multi-state corporations, capital is apportioned to Mississippi on a formula/ratio basis. The ratio is calculated by dividing the sum of the book value of real and tangible personal property owned in the State plus the gross receipts received from business activity in the State by the sum of the value of real and tangible total corporate personal property plus total corporate gross receipts received. The ratio is then applied to the total capital stock, surplus and undivided profits, and true reserves to calculate the amount of capital apportioned to Mississippi. This amount is then multiplied by the franchise tax rate to obtain the amount of franchise tax owed.

Sales and Use Tax

Sales and use taxes are applied to all businesses having legal existence within the state. Although sales taxes vary, based upon the types of transactions, the list below details some of the more specific sales taxes relative to manufacturers.

A use tax applies to personal property purchased in another state but utilized in Mississippi. The use tax is computed by applying the Mississippi sales tax rate applicable to that type of property less credit allowed for sales or use taxes paid in the state of purchase. Used property is generally taxed on the basis of its book value figured on straight line depreciation.

Sales to a Manufacturer

Raw materials (except sand and gravel, 5 cents per ton) 0%
Catalysts, chemicals, or gases used directly in processing (except natural gas, 1.5%) 0%
Packaging and containers for sale with finished goods 0% 0%
Machinery and parts used directly in manufacturing and port operations (purchase or rental) 1.5%
Industrial electricity, natural gas and fuels 1.5%
Industrial water 7%
Telephone and telegraph 7%
Other equip., furniture, fixtures, materials, supplies, & rentals not used directly in manufacturing 7%
Contract construction for projects over $10,00 (except residential) 3.5%

Sales by a Manufacturer

To final consumer or user 7%
To another manufacturer for use in manufacturing machinery 1.5%
To another manufacturer as a raw material for further processing 0%
To a wholesaler or retailer or resale 0%
To exempt customers (example – government agencies, educational institutions, etc.) 0%

State Unemployment Compensation Tax

Mississippi levies an unemployment tax on the first $7,000 of an employee’s annual wages. The maximum rate is 5.4%. The minimum varies from year to year depending upon the general experience rate of the State. The minimum tax rate is 1.2%. New employers in the State are assigned a tax rate of 2.7% until such time as they establish an individual experience rate.

Workers’ Compensation

Employers in Mississippi having five or more employees must purchase workers’ compensation coverage through insurance carriers, or qualify with the Mississippi Workers’ Compensation.

Commission as a self-insurer. Compensation is two-thirds of the claimant’s wages up to the maximum of two-thirds of the average weekly wage, or $235.84, for up to 450 weeks, but not to exceed $106,128 excluding medical payments. These amounts are indexed on an annual basis.

Personal Income Tax

Individual income is taxed at the same rate as corporate income: 3% of the first $5,000 of taxable income, 4% of the next $5,000, and 5% of the balance. Individuals are allowed personal exemptions.

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