Mississippi, known for its Southern charm and rich heritage, has a tax system that’s straightforward to navigate. Understanding what is sales tax in Mississippi is as simple as enjoying its famous hospitality and warm traditions.
This guide breaks down everything you need to know about Mississippi’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Mississippi’s sales tax with confidence and ease.
Sales Tax Nexus in Mississippi
When a business creates either a physical or economic nexus, it is required to collect sales tax in Mississippi.
Physical Nexus
A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Mississippi include:
- Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
- Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
- Employees, independent contractors, agents, or other representatives operating on your behalf.
- Presence at Trade Show: If you’re attending conventions or trade shows in Mississippi, you might need to collect and pay Mississippi use tax on any orders you take or sales you make at the event.
- Mail order sales: Businesses must collect Mississippi use tax on mail order sales if they operate, have a presence, or deliver goods under contracts accepted in the state.
To stay informed about the current criteria for establishing a physical sales tax nexus in Mississippi, take a look at the official regulations available right
here!
Economic Nexus
States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.
Beginning September 1, 2018, the threshold for economic nexus in Mississippi is $250,000 in gross revenue in the prior 12 months.
While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing economic sales tax nexus. To access a comprehensive list of these rules, please refer to the
governing laws for economic sales tax nexus requirements in Mississippi.
Mississippi Sales Tax on Goods and Services
One of the first things you need to know is whether the goods you’re selling or services you’re offering are taxable in Mississippi.
Tangible Products
Almost all goods are taxable in Mississippi, including:
The goods that are exempt from sales tax are:
- Diapers
- Feminine Hygiene Products (i.e. napkins, tampons)
- Prescription Medications – Prescription drugs dispensed by a licensed pharmacist with a valid prescription are exempt from sales tax. Over-the-counter medications are generally taxable, regardless of a physician’s prescription.
- Textbooks
- Medical Devices
- Agricultural Supplies: Seeds, fertilizers, and machinery used directly in farming are exempt
Services
In Mississippi, the majority of service-based transactions, such as information services and employment services, are not subject to sales tax.
However, there are specific situations where certain services are taxable. For instance, taxable services are:
- Air conditioning installation or repairs
- Shoe repairing
- Welding
- Woodworking or wood turning shops
- Computer software services performed within Mississippi
Software as a Service (SaaS)/Digital Products
SaaS is not taxable in the state of Mississippi.
Digital products (i.e., ebooks, downloadable video content, mobile apps) are
taxable.
Shipping/Handling
Shipping and handling charges in the state of Mississippi are included. Sales or use tax on delivery charges depends on the tax status of the item being delivered. Delivery charges are tax-exempt if the delivered item is exempt.
Sales Tax Permits and Licenses in Mississippi
Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Mississippi, the next important step is getting your Mississippi Seller’s Permit, also known as a sales tax permit.
Seller’s Permit
You can register for a Mississippi sales tax permit online at the
Department of Revenue State of Mississippi TAP website.
Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:
- Business Identification Information (name, address, phone number, email address)
- Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Owner/Partner/Officer Information
- Business Activity Details (description of products or services sold, sales volume, date of the first sale or the expected date to start dates)
- Copy of your IRS Notice Letter CP 575/EIN Confirmation Letter
- NAICS code
Registration fee
There is
no fee to register for a sales tax permit.
Renewal
In Mississippi, you don’t have to renew your sales tax permit.
Resale Certificate
A resale certificate is a document that allows businesses to buy products without paying sales tax on them as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.
In Mississippi, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller would report tax on the final sale of the items.
Streamlined Sales Tax (SST)
The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Mississippi is not a party to this program, , meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.
Check with the Mississippi Revenue Services for the most current information on Mississippi’s participation in the Streamlined Sales Tax initiative.
Calculating and Collecting Sales Tax in Mississippi
Sales Tax Computation
In Mississippi, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs.
Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Mississippi and sells to a customer in Jackson, MS, with a ZIP code of 39202. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:
 |
SALES TAX FORMULA |
RATE |
| State: |
Mississippi |
6.50% |
| County: |
Hinds County |
0.00% |
| District: |
Second District |
0.00% |
| City: |
Jackson |
1.00% |
| Combined Sales Tax Rate = |
8.00% |
|
Origin-based vs. Destination-Based
When making in-state sales, it is important to determine if you are located in an origin-based state or destination-based state to figure out what rate to charge for sales tax.
Mississippi is an
origin-based state, meaning sales tax is determined based on the seller’s location. That means for a Mississippi-based seller, sales tax is generally based on the location of the seller when selling within the state.
For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Texas to a customer in Gulfport, Mississippi, where you have nexus, you’d apply Gulfport’s sales tax rate to that sale.
To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.
Filing and Remitting Sales Tax Returns in Mississippi
The next step after collection is filing and remitting your Mississippi sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually.
- Monthly returns: required if your annual remittance is $3,600 or more.
- Quarterly returns: must be filed if your annual remittance falls between $600 and $3,599.
- Annual returns: apply if your annual remittance is less than $600.
It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Mississippi’s sales tax regulations.
Due Dates
In Mississippi, the due date falls on the
20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.
However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for the month of April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.
Monthly Prepayments
Businesses with a notable sales tax liability may need to make monthly prepayments ahead of their monthly return filings. The specifics of these prepayments depend on the business’s prior year’s tax liabilities.
Mississippi Pre-pay Sales Tax on a Vehicle lets vehicle buyers pay sales tax before titling or registering, avoiding penalties while awaiting dealership paperwork. Dealers can also use it to pay a customer’s sales tax.
Filing Sales Tax Returns
To file your sales tax return for Mississippi, a few options are available:
- File online through the Mississippi Department of Revenue.
- File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.
Timely Filing Discount
Some states offer businesses a discount for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. Since July 2019, the DFA has provided a 2% discount for timely filings, capped at $1,000 monthly. Local jurisdictions may also offer a 2% discount, up to $4,000 per city or county.
Sales Tax Holiday
Currently, for 2024 – 2025, the planned sales tax holidays in Mississippi are:
| DATE |
TYPE |
ELIGIBLE MERCHANDISE |
| July 11, 2025 – July 13, 2025 |
Back-to-School Sales Tax Holiday |
- any article of clothing with a taxable value of $100 or less;
- Footwear (less than $100)
|
| August 29-31, 2025 |
Second Amendment |
- Firearms
- Ammunition
- Hunting supplies (tangible personal property used for hunting, including, and limited to, archery equipment, firearm and archery cases, firearm and archery accessories, hearing protection, holsters, belts, and slings.)
|
|
Mississippi Sales Tax Penalties
Like in most states, sales tax is a big part of how Mississippi generates revenue. Thus, maintaining compliance with sales tax regulations is of the utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial always to ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.
Here are the specific penalties for non-compliance with sales tax regulations in Mississippi:
- Failure to File or Pay: A penalty of 10% of the tax due for the first offense if the failure is persistent, willful, or recurring.
- Repeated Offenses: The penalty is 10% of the tax due for the first offense, 15% for the second offense, 25% for the third offense, and 50% for any subsequent offense.
- Failure to Pay After Notice: The penalty is 15% of the tax due for the first offense, 25% for the second offense, and 50% for any subsequent offense.
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