Looking for a home for your new business? Mississippi might be just the place. In addition to its rank as the most affordable state to live in, 82% of the Magnolia State’s startups remain active after their first year in business.
But if you want your venture to be successful, you’ll also need to know how much you can expect to pay in business taxes each year. To help you determine what your tax liability might look like in Mississippi, we’ll look at the following:
What business taxes do you pay in Mississippi?
When it comes down to it, the business taxes you pay—and how much you owe—are determined by factors like your annual revenue, employer status, and business structure. Business owners in Mississippi can typically expect to pay income tax, sales tax, and employer-related taxes if they plan on hiring employees.
Keep reading to learn more about Mississippi’s business taxes, as well as how to file and pay them.
Mississippi personal income tax
If you structure your business as a pass-through entity—such as a sole proprietorship, partnership, or limited liability company (LLC)—the business itself doesn’t pay income taxes. Instead, those taxes are passed on to your personal tax returns.
In the state of Mississippi, the personal income tax rate in 2023 is 5%.
How to file and pay your return
Mississippi individual tax returns (Form 80-105 for residents and Form 80-205 for part-year residents or nonresidents) are due by the 15th day of the fourth month after the end of the fiscal year (or April 15 for calendar year filers).
Business owners can pay this tax (and most of your other state business taxes as well) online through the Mississippi Taxpayer Access Point (TAP) system. To use the platform, you’ll first need to register your business and create a new tax account for it.
If your annual income tax liability exceeds $200, you can expect to pay your taxes multiple times throughout the year as quarterly estimated tax payments. These payments are due on April 15, June 15, September 15, and January 15 and can be paid online via TAP. If you prefer to pay by mail, submit payment voucher Form 80-106 along with your payment to the appropriate address listed on the payment voucher form.
For more information on filing Mississippi individual income tax returns, review these instructions from the Department of Revenue.
Mississippi pass-through entity tax election
Partnerships, S corporations, and LLCs that are taxed as a partnership or S corporation can choose to file their taxes as a pass-through entity (PTE) in the state of Mississippi.
Making this election allows the owners or shareholders of the company to file and pay their business taxes as one entity rather than individually on their personal returns. Businesses that are taxed as a PTE then pay the corporate income tax rate (which ranges from 4% to 5% in 2023).
Once your business elects to file taxes as a PTE, it will be taxed as a PTE in future tax years until the election is revoked by the owners or shareholders.
How to file and pay your return
The pass-through entity election can be made by submitting Form 84-381 via TAP. PTE returns (Form 84-105) are due by the 15th day of the third month following the end of the fiscal year. For calendar filers, the due date is March 15.
Elected pass-through entities with assets worth $250,000 or more are required to file electronically through an authorized software provider. All other entities can mail their returns to the address below:
Department of Revenue
P.O. Box 23192
Jackson, MS 39225-3192
When filing the return, make sure to include with your tax form a copy of your PTE election form and Form 84-132 for each owner, member, partner, or shareholder of the business.
In the state of Mississippi, businesses with an annual income tax liability of over $200 are required to make quarterly estimated tax payments to the Department of Revenue. Submit these payments through TAP or by mail (along with payment voucher Form 84-300) by the 15th day of the fourth, sixth, ninth, and 12th months of the fiscal year.
However, keep in mind that the full tax noted on your PTE return must be paid in full by the 15th day of the third month after the end of your fiscal year.
For more information on the Mississippi PTE election, review the frequently asked questions or these PTE income and franchise tax instructions.
Mississippi corporate income tax
Corporations that do business, earn income, or exist in the state of Mississippi are expected to pay the state’s corporate income tax.
The state income tax rate for corporations ranges from 4% to 5%.
How to file and pay your return
Corporate income tax returns (Form 83-105) are due by the 15th day of the fourth month after the end of the fiscal year. If your business follows the calendar year, tax returns are due on April 15.
Corporations with $250,000 or more in assets must file their taxes electronically through an authorized software provider. If you don’t meet this requirement and prefer to file by mail, you can request a paper application by calling 601-923-7700. Paper filers can then send their tax return to this address:
Department of Revenue
P.O Box 23191
Jackson, MS 39225-3191
Corporations that owe over $200 annually in income taxes must pay quarterly estimated taxes by the 15th day of the fourth, sixth, ninth, and 12th months after the end of the fiscal year. These payments can be made online via TAP or submitted by mail (along with Form 83-300) to the address below:
Department of Revenue
P.O Box 23192
Jackson, MS 39225-3192
Review the Mississippi corporate income tax return instructions for more information on the state’s tax filing guidelines.
Mississippi franchise tax
Both C corporations and S corporations must pay an annual franchise tax for the privilege of incorporating or doing business in the state of Mississippi.
This tax is $1.25 for every $1,000 over the first $100,000 you spend doing business in Mississippi, with a minimum tax of $25. However, if your business owns any property in Mississippi with a value greater than the amount you spend doing business in the state, your franchise tax liability is calculated using that number instead.
How to file and pay your return
Businesses file their Mississippi franchise taxes using the corporate income tax form (Form 83-105), so the due dates, filing method, and payment method are also the same.
Sales and use tax
Companies that sell physical products or certain taxable services may be required to collect sales tax at the point of purchase and pay it to the Department of Revenue.
On the other hand, if your business has purchased personal property for use within the state and hasn’t paid a sales or use tax equal to or greater than the Mississippi sales tax rate, you may be subject to the state’s use tax.
The state sales and use tax rate is 7%, although the state may charge different rates for certain products, services, and business activities. For more information on the different sales and use tax rates levied by the state, visit the Department of Revenue website.
How to file and pay your return
Businesses that are required to collect Mississippi sales and use taxes must first register for a sales permit through the online TAP system. Keep in mind that, if your business has multiple locations, you’ll need to sign up for a separate license for each one.
In Mississippi, sales taxes are due on a monthly, quarterly, or yearly basis. Your filing frequency is determined by your annual tax liability:
- Businesses that owe $3,599 annually file monthly
- Businesses that owe between $600 and $3,599 file quarterly
- Businesses that owe less than $600 file annually
No matter your filing frequency, sales tax returns are due by the 20th day after the end of the tax period. The Department of Revenue encourages all businesses to file their returns electronically via TAP. However, if you can’t file electronically, the state will mail pre-addressed sales tax forms to your business 30 days before your filing due date. Send these forms along with any payment to the following address:
Department of Revenue
P. O. Box 960
Jackson, MS 39205
To learn more about the state sales tax, go to the Department of Revenue website.
Withholding tax
If your small business hires employees, you’ll need to withhold money from their earned wages and pay them to the Mississippi Department of Revenue. These taxes are usually known as withholding taxes or employment taxes.
Withholding tax rates will vary between employees, so use the tax tables provided by the Department of Revenue to determine how much to withhold from each employee’s paycheck.
How to file and pay your return
If they haven’t already, employers must create a withholding tax account on TAP to file and pay their withholding taxes.
Most businesses are then assigned a monthly or quarterly filing frequency by the state. Typically, monthly filers owe $300 or more in state withholding taxes a month, while quarterly filers owe less than $300 each month. Withholding tax returns are due by the 15th day of the month after the end of the filing period, even if you didn’t have any employees during that time.
Smaller businesses (those filing 25 paper returns in a tax year) must file an annual return (Form 89-140) instead. Mail this tax form along with Forms W-2 and 1099 to the address below:
Department of Revenue
Withholding Tax Division
PO Box 23058
Jackson, MS 39225-3058
Review this guide from the Department of Revenue for more information on Mississippi withholding taxes.
Unemployment tax
Mississippi employers also pay state unemployment insurance taxes to cover the unemployment benefits for eligible former employees.
As of 2023, Mississippi employers pay 0.2% to 5.4% on the first $14,000 of each employee’s wages.
New employers are charged a 1% tax rate in their first year of business, 1.1% in their second year, and 1.2% in their third year and onward until they become eligible for a modified rate. From there, the Department of Employment Security assigns established employers a new tax rate based on factors like the amount of benefits charged to the employer’s account and the size of the employer’s payroll.
How to file and pay your return
Unemployment tax returns (Form UI-2 and UI-3) and tax payments are due each quarter by April 30, July 31, October 31, and January 31.
In order to file unemployment taxes, Mississippi employers must register their business online with the Department of Employment Security. You’ll use this same portal to file and pay your unemployment taxes. If you prefer to submit your quarterly reports by mail, send them to this address:
Mississippi Department of Employment Security
Tax Department
PO Box 22781
Jackson, MS 39225-2781
Visit the Department of Employment Security website to learn more about Mississippi’s unemployment taxes.
Other industry-related and local taxes
In addition to the business taxes levied by the state, Mississippi municipalities may decide to charge their own taxes. For instance, many cities and counties impose their own sales tax. The state’s maximum local sales tax rate is 1%, resulting in an average combined state and local sales tax rate of 7.07%.
Mississippi also charges taxes on certain products, services, and business activities. So, make sure to talk to your accountant or tax advisor to find out if any of these taxes apply to your business.
Mississippi business tax breakdown by business type
With all the work that goes into running a successful venture, it’s not easy to also keep track of all the taxes your business is responsible for. That’s why we’ve included a chart breaking down the taxes each type of business can expect to pay in the state of Mississippi.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—their owners pay those taxes on their personal tax returns instead.
| Business type | Individual income tax | Pass-through entity tax | Corporate income tax | Franchise tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
| C corporation | No | No | Yes | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
| S corporation | Depends if it takes the PTE election | Yes, if it takes the election | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| LLC | Depends on how it’s structured and if it takes the PTE election | Depends on how it’s structured and if it takes the election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| Partnership | Depends if it takes the PTE election | Yes, if it takes the election | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
| Sole proprietorship | Yes | No | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
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