Sales tax at a glance

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Mississippi sales tax rates & calculations in 2023

The Mississippi sales tax rate in 2023 is 7% to 8%. This comprises a base rate of 7% plus a maximum local rate of 1%. Depending on the local sales tax jurisdiction, the total tax rate can be as high as 8%.

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FAQs

How do you calculate Mississippi sales tax?

To calculate Mississippi sales tax, multiply the purchase price by the combined state and local tax rate. For example, if a product costs $100 and the local rate in Jackson is 1%, you would calculate:

$100 x 8% = $8 sales tax

What’s the difference between destination-based and origin-based sales tax states?

Mississippi is an origin-based sales tax state, meaning sellers charge tax based on the location of the seller/point of origin. In destination-based states, tax is charged based on the customer's location.

Is Mississippi a streamlined sales tax state?

As of December 2022, Mississippi is not a Streamlined Sales and Use Tax Agreement (SSUTA) member.

Sales tax nexus in Mississippi

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FAQs

Do I need a Mississippi seller's permit if I’m only a wholesaler?

Wholesalers may still need a seller's permit or wholesale license for sales tax on deliveries, customer pick-ups, or samples. Check with the MS DOR.

Do I need a Mississippi seller's permit if I only sell temporarily in the state?

You likely need a seller's permit if you are based outside MS and attend a trade show or temporary event.

Exemptions from sales tax in Mississippi

Mississippi provides sales tax exemptions for various goods and services by law under Section 27-65-101 to 27-65-111 of the Mississippi Code. Major categories of exemptions include:

Food and Grocery Items

Most non-prepared food items are exempt in Mississipi. This includes meat, dairy, fruits and vegetables, breads, and grains purchased without food stamps. However, prepared foods intended for consumption on the seller's premises are generally taxable.

Prescription Drugs and Medical Items

Sales of prescription drugs and medicines are exempt from sales tax in Mississippi. Also exempt are medical equipment, devices, and supplies listed under Medicare/Medicaid plans or prescribed by a licensed physician. Sales to non-profit hospitals are exempt as well.

Agricultural Items

Sales of livestock, seeds, feed supplies, and various equipment to farmers are exempt from Mississippi sales tax. Chemicals used for agricultural production, like fertilizers and pesticides, are also tax-exempt.

Industrial Machinery and Manufacturing Components

Sales of industrial machinery, manufacturing components like chemicals and gases, welding materials, and packaging supplies are exempt. This aims to reduce input costs for Mississippi manufacturers.

School Textbooks and Supplies

Sales of textbooks to schools and students are exempt from sales tax in Mississippi. During the 4-day back-to-school sales tax holiday each summer, clothing and footwear under $100 and school supplies are tax-exempt.

Government and Non-Profit Entities

Sales tax does not apply to purchases by the federal government, the state of Mississippi, counties, and municipalities, public schools, chartered non-profit hospitals, and certain tax-exempt organizations.

Other Exemptions

Some partial or temporary sales tax exemptions exist as well. For example, sales tax holidays reduced sales tax on food purchased with SNAP benefits.

The Mississippi Department of Revenue provides a full list of sales tax exemptions on its website. The taxability of an item depends on its exact nature, usage, buyer, and other factors.

FAQs

Are groceries taxable in Mississippi?

Most grocery food items are exempt from Mississippi sales tax. Some prepared foods or food intended to be consumed on the seller’s premises may be taxable.

Is clothing taxable in Mississippi?

Clothing and footwear are generally taxable unless sold during the 4-day sales tax holiday for clothing under $100.

Are digital products taxable in Mississippi?

Yes, digital products like movies, music, and ebooks are taxable if accessed in Mississippi.

Is software-as-a-service (SaaS) taxable in Mississippi?

SaaS and other intangible digital services are not subject to Mississippi sales tax.

Are services taxable in Mississippi?

Most services in Mississippi are not subject to sales tax. Exceptions include installation, delivery, and interior decorating.

Excise taxes in Mississippi

In addition to general sales tax, Mississippi levies selective excise taxes on specific goods like tobacco, alcohol, and fuel:

Tobacco Excise Tax

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Alcoholic Beverages Tax

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Motor Fuel Excise Tax

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There are currently no excise taxes on recreational marijuana in Mississippi as it remains illegal. However, there is an active campaign to legalize medical marijuana which may result in cannabis excise taxes.

Food and Beverage Tax in Mississippi

While most states levy sales tax on food and beverages sold at grocery stores, restaurants, and bars, Mississippi does not have a statewide general sales tax on food and drinks.

However, the state does collect excise taxes on alcoholic beverages like beer, wine, and liquor at the distributor level as outlined above. Some counties also allow cities or municipalities to impose additional food and beverage taxes on restaurants or prepared foods.

Remote sellers in Mississippi

Remote sellers with no physical locations or staff living in Mississippi can still meet substantial economic nexus thresholds based on their volume of sales. Selling over $250,000 or processing 200+ transactions for Mississippi customers creates a sales tax obligation.

Once registered, remote sellers must collect, report, and remit the 7% Mississippi sales tax rate on all taxable sales sourced to Mississippi along with any local taxes based on delivery jurisdiction.

Prepaid sales tax rates for fuel

Mississippi has a prepaid sales tax on motor fuel, ranging from 18-18.5 cents per gallon depending on the region. There is also a prepaid aviation gasoline tax of 6-6.4 cents per gallon. These are paid upfront when the fuel is sold to the distributors.

Collecting sales tax in Mississippi

Let's look at the steps for out-of-state sellers to collect Mississippi sales tax.

How to collect sales tax in Mississippi if you are not based in Mississippi (Out-of-State)

Even if you do not have a physical location in Mississippi, you likely need to register and collect sales tax if you meet the economic nexus threshold of $250,000 in sales or 200+ transactions in the prior 12 months.

Once you exceed the economic nexus thresholds, you are considered to have a sales tax nexus in Mississippi. At that point, you must:

• Register online for a Mississippi seller's permit
• Begin collecting 7% sales tax on orders from Mississippi buyers
• Remit the collected sales tax on your Mississippi sales tax returns

Other activities can trigger a sales tax collection responsibility in Mississippi:

• Having inventory stored in Mississippi warehouses or fulfillment centers
• Attending conventions or trade shows held in Mississippi

Register for your seller’s permit online through the Mississippi TAP system. Once registered, you must charge, collect, report, and remit Mississippi sales tax even if you do not have a physical location in the state.

Should you collect sales tax on shipping charges in Mississippi?

If the items sold are subject to Mississippi sales tax, the shipping and handling charges are generally taxable. The sales tax in MS would apply to the total product cost plus the shipping fees.

Filing and paying sales taxes in Mississippi

Sales tax returns and payments in Mississippi must be submitted electronically through the TAP system by the due date. Paper filing is still an option if electronic filing is not possible.

Sales tax return filing schedule and due dates in Mississippi

Filing frequency in Mississippi is assigned as monthly, quarterly, or annually based on your sales volume:

Monthly: Returns and payments are due on the 20th of the following month

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Quarterly:

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Annual:

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Filing penalties in Mississippi

The penalty for late filing in Mississippi is 10% of the unpaid tax due. Additional penalties and interest charges may apply for continued delinquency.

FAQs

What are the Mississippi sales tax due dates?

Sales tax due dates in Mississippi are the 20th of the following month after the close of the filing period, whether filing monthly, quarterly, or annually.

I didn’t collect any Mississippi sales tax this filing period. Do I still need to file a return?

Yes, every business with an active seller's permit must file a $0 sales tax return each period, even when no tax was collected.

Can I get an extension on filing my Mississippi sales tax return?

You can submit a written request to the MS Department of Revenue for a 30-60-day extension. However, tax payments are still due on the original deadline.

What is the penalty for filing and paying Mississippi sales tax late?

Mississippi charges a 10% penalty on unpaid taxes. Interest accrues as well until all tax liabilities are settled. Total penalties plus interest cannot exceed 25% of the tax owed.

Audit & appeals process

You'll go through the Mississippi Department of Revenue’s audit process if audited. This begins with the auditor contacting you to provide records and explain your tax reporting.

If the audit identifies unpaid taxes, you can contest the findings. The appeals process involves filing petitions to dispute assessments and requesting hearings to present evidence supporting your case.

Mississippi sales tax audit process

The steps in a Mississippi sales tax audit are:

1. Receive audit notice and prepare requested records
2. The auditor reviews records and tax returns, determines findings
3. Get audit results and assessment if taxes found owed
4. File petition to appeal within 60 days if disputing findings
5. Attend appeals hearing to present evidence and contest audit
6. Receive final order from hearings officer

What to expect during the audit?

The auditor will review your Mississippi tax returns, sales records, exemption certificates, and other documents to verify reporting accuracy and identify any unremitted taxes. You may need to explain your business processes, bookkeeping, and record retention to the auditor.

After the audit – Appealing the results

You can file an appeal within 60 days of receiving an assessment with additional tax due. The appeals process involves submitting evidence and arguing why you disagree with the auditor's findings. If the appeals hearing upholds the assessment, you may file an appeal with the Mississippi Tax Tribunal.

Sales tax registration

Here are the steps for registering for a seller's permit in Mississippi:

How to register for sales tax in Mississippi

Register online for a seller's permit through the Mississippi TAP system. You'll need to provide:

• Your business name, address, ownership type
• Social Security # or FEIN tax ID number
• Description of business activities
• Types of products sold

Once registered, you must collect, report, and remit sales tax on Mississippi taxable sales.

Registration requirements for online sellers

Out-of-state sellers with over $250,000 in Mississippi sales or 200+ transactions in the prior 12 months have economic nexus and must register to collect sales tax.

Cost of registration for a Mississippi sales tax license

There is no fee to register for a Mississippi seller's permit. However, other business registration costs may apply.

More Information & Contacts

For questions on Mississippi sales tax rules and procedures:

• Authority Name: MS Department of Revenue
• Phone number: 601-923-7015
• Website: dor.ms.gov

There you have it—a perfect guide on Mississippi's sales tax laws. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.