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On December 3, 2025, Mississippi Governor John Smith signed into law a comprehensive tax reform package aimed at stimulating economic growth and providing relief to state taxpayers. The new legislation, which had bipartisan support, includes a reduction in income tax rates for individuals and businesses, as well as changes to various tax credits and deductions.The most significant change in the tax reform package is a lowering of income tax rates across the board. Individual income tax rates will be reduced by an average of 5%, with the top rate dropping from 5% to 4.5%. For businesses, the corporate income tax rate will be reduced from 3.5% to 3%, making Mississippi more competitive with neighboring states.In addition to the rate reductions, the tax reform package also includes changes to various tax credits and deductions. The legislation expands the Earned Income Tax Credit for low-income working families, providing additional relief to those in need. It also eliminates certain tax loopholes and credits that were deemed outdated or ineffective.Governor Smith praised the tax reform package as a necessary step towards spurring economic growth in Mississippi. "By lowering tax rates and simplifying our tax code, we are making our state more attractive to businesses and individuals looking to relocate or expand," he said in a statement. "This reform will help create new jobs, increase wages, and improve the overall quality of life for all Mississippians."The tax reform package is set to take effect on January 1, 2026. State officials are hopeful that the changes will lead to increased revenue for the state and provide much-needed relief to taxpayers. Critics, however, argue that the tax cuts will lead to budget shortfalls and cuts to essential services.Overall, the tax reform legislation represents a significant shift in Mississippi's tax policy and sets the stage for future economic growth and prosperity in the state.