JACKSON, Miss — The Mississippi Senate voted 39-10 to advance a $524.1 million tax cut, the largest in the state’s history, to Governor Tate Reeve's desk Sunday.
Reeves stated he is "married" to the idea of an income tax phase out in the state, and called the tax cut a good thing on Twitter Saturday.
The tax cut would see the state’s 4% bracket would be eliminated in the upcoming fiscal year, which begins in July.
Between Fiscal Year 2024 and 2026, the current top rate of 5% would be reduced to a 4% flat rate.
When fully phased in, Mississippi’s income tax rate will be one of the lowest the nation among the 43 states which have an income tax.
“Moving to a flat 4% income tax without any corresponding tax increases puts millions of dollars back in taxpayers’ pockets and makes Mississippi one of the most competitive in the nation in terms of income tax rates,” Lt. Governor Delbert Hosemann said.
In 2016, the Legislature passed a $415 million tax cut bill phasing out the 3 percent tax bracket by 2022. The same legislation phased out the franchise tax on businesses over a ten-year period ending in 2028.
Hosemann said revenue for the last fiscal year (FY 2021) and current fiscal year (FY 2022) are above projections, though experts have advised revenues are likely buoyed by the significant federal recovery funds flowing into the state.
Hosemann said budget analysts have also advised that despite some uncertainty in the economy, the tax cut is sustainable.
“We have been advised we can absorb this cut and still invest in the core government services constituents expect us to fund in infrastructure, education, healthcare, and other areas,” Hosemann said. “We welcome any opportunity to return taxpayer dollars to hard-working Mississippians.”
