Mississippi Sales Tax
Mississippi Sales Tax At a Glance
State rate: 7%
Maximum combined rate: 8%
Sourcing: Origin
Tax Holidays: Back to School, Second Amendment
Governing Body: Mississippi Department of Revenue
When you’re making sales to customers in Mississippi, you need to be sure you’re aware of the state’s sales tax regulations to remain compliant with them. That means determining if you are required to collect and remit sales tax based on your small business’s nexus status and whether what you’re selling is taxable under Mississippi law.
Mississippi Sales Tax Rates
The state sales tax rate in Mississippi is 7%. Several cities impose a tax, making the effective rate in Tupelo 7.25% and the effective rate in Jackson, Pearl, Clinton, Ridgeland, and Byram 8%. The base state rate is the only one in effect in the rest of the state, although other cities have the option to add their local sales taxes at some point in the future if they choose. There are no taxes imposed at the county level in Mississippi.
While a broad sales tax is not common in Mississippi cities, many impose Tourism and Economic Development taxes at varying rates. These generally impact restaurants, bars, hotels, and motels, so while they are related to sales, their impact is concentrated and not something most retail businesses need to worry about. There are some special statewide rates on this tax rate table for particular items, however, and these include farm tractors, farm implements, and manufacturing machinery, among others.
Sales Tax Nexus Requirements in Mississippi
To be liable for collecting and remitting sales tax in Mississippi, your business must have a sales tax nexus, or significant physical presence, in the state. This is constituted by:
- Owning business property in the state
- Having employees working in the state to service customers
- Having employees or other representatives soliciting and accepting orders in Mississippi
Economic nexus is established in the State of Mississippi if $250,000 or more in sales are made to residents within the state over the preceding 12 month period. If Economic Nexus is triggered, out-of-state sellers are required to register to collect and remit sales tax.
What’s Taxable on Mississippi?
All sales of tangible personal property are subject to sales tax in Mississippi unless specifically exempted. Some of these exemptions include:
- Prescription drugs and medical devices
- Gasoline
- Insecticides and fungicides when used for agricultural purposes
- Feed for livestock and poultry
- Seeds and fertilizer
- Food paid for with food stamps
Some sales of items that would otherwise be taxable are exempt under certain circumstances. For example, a sale of tangible personal property may be exempt if:
- It’s made directly to the federal government, the state of Mississippi, or counties and cities within the state
- It’s made directly to a non-profit or public school
Shipping is taxable in Mississippi as long as the item being shipped is taxable. Many services are also taxed under the state sales tax statute, including car repair, air conditioning installation, plumbing, pest control, and more.
Sales Tax Holidays
There are two annual sales tax holidays in Mississippi. These are the Clothing Tax Holiday, held on the Friday and Saturday of the last weekend in July, and the Second Amendment Tax Holiday, held Friday through Sunday of the last weekend in August.
During these periods, specific items that would otherwise be subject to sales tax are sold tax-free across the state. The Back to School Tax Holiday applies to clothing and footwear, not accessories like jewelry, watches, handbags, or wallets. To qualify, each item must have a retail price under $100.
The Second Amendment Tax Holiday applies to firearms, ammunition, and certain hunting supplies, including:
- Archery equipment
- Firearm and archery cases
- Firearm and archery accessories
- Hearing protection
- Holsters
- Belts and slings
Anyone making sales to customers in Mississippi is required to participate in these tax holidays, and that includes out-of-state sellers shipping into the state as well.
Mississippi Sales Tax Registration and Filing
Before you can collect sales tax from your Mississippi customers, you must register with the state. Registration can be completed online or by mail, and it can take two weeks from your application approval for you to receive your permit in the mail. You may not do business in the state until you’ve received the actual permit, so you’ll have to register a few weeks before you plan on making any sales in Mississippi.
Registration is free, but you may be required to submit a bond depending on the nature of your business and other particulars. Your permit will never expire or need to be renewed, and you must file a zero return for as long as you have an active permit, even if you make no sales in the state over the period in question.
Filing online is preferred, although mailing your sales tax returns is also an option. For mailed returns and payments to be considered timely, they must be postmarked by the due date. The state determines the frequency with which you must file when you apply for your sales tax permit. Generally, businesses with an average monthly tax liability of over $300 must file monthly, while those with an average monthly tax liability of $50 to $300 will file quarterly. On average, sellers with a liability of less than $50 per month will file annually.
Mississippi Sales Tax Due Dates and Penalties
Returns and payments are due on the 20th of the month following the close of the period in question. If that falls on a weekend or holiday, the due date moves to the next business day. If filing and paying by mail, you can remit your returns to:
Department of Revenue
P.O. Box 960
Jackson, MS 39205
Monthly Due Dates
| Period | Due Date |
|---|---|
| January | February 20 |
| February | March 20 |
| March | April 20 |
| April | May 20 |
| May | June 20 |
| June | July 20 |
| July | August 20 |
| August | September 20 |
| September | October 20 |
| October | November 20 |
| November | December 20 |
| December | January 20 |
Quarterly Due Dates
| Period | Due Date |
|---|---|
| January – March (Q1) | April 20 |
| April – June (Q2) | July 20 |
| July – September (Q3) | October 20 |
| October – December (Q4) | January 20 |
Returns and payments are due on January 20th for annual filers.
If your return or payment is late, the state will assess a penalty of 10% of the total tax due, or they will charge interest on the payment at the rate of 1% per month, or both.
Resources
Mississippi Sales Tax Software
Whether you’re selling only to customers in Mississippi, or you ship your goods to multiple states, you need to make sure you can keep up with the regulations and requirements covered under the state’s sales tax statute. That means making sure you’re charging your customers at the right rate and only for taxable items or services, and it also means filing your returns and submitting your payments on time.
This can quickly become overwhelming, particularly if you have to keep track of sales and returns for multiple states. Fortunately, TaxTools combines all of the necessary sales tax calculator software to make tracking your taxable sales and filing your returns as streamlined as possible. It can produce various reports whenever you need them, and it integrates smoothly with all eCommerce platforms, so you don’t have to change anything about how you do business to take advantage of its many benefits. TaxTools will periodically check for changes to local and state tax laws to ensure you’re always up to date. It will determine the appropriate rate to collect from your customers based on their delivery address.
If you’re ready to learn more about how TaxTools can help your small business grow while simultaneously relieving the burden of worrying about sales tax compliance, click here to sign up for a free trial today.
Last updated May 2023