Mississippi — Sales & Use Tax

Mississippi imposes a state sales tax of 7% on the gross proceeds of retail sales of tangible personal property, with a critical exception for groceries as defined by SNAP eligibility standards.

General base rate: The standard state sales tax rate remains 7% for most retail sales of tangible personal property and specifically enumerated taxable services. This is set forth in Miss. Code Ann. § 27-65-17(1)(a), which remains the central statute for sales tax imposition. Taxable services at the 7% rate include utility services, repair services, prewritten software, and digital goods, while various exclusions (such as sales of real estate and securities) remain in effect.

Reduced rate for groceries (effective July 1, 2025): Beginning July 1, 2025, retail sales of “eligible food and drink for human consumption,” as precisely defined by federal SNAP eligibility under 7 U.S.C. § 2012(r), are subject to a reduced 5% sales tax rate per Miss. Code Ann. § 27-65-17(1)(g), as amended by HB 1 (2025 Regular Session). Groceries for this purpose do not include hot prepared foods, alcoholic beverages, or food consumed on the premises, and only those items meeting the federal SNAP test receive the reduced rate. The Department of Revenue has clarified compliance requirements for retailers: POS systems and registers must distinctly apply the 5% rate to qualifying grocery items, while the 7% rate continues to apply to all other taxable sales not otherwise exempt or reduced by specific statute.

The definition and itemization of SNAP-eligible groceries follows federal standards and mirrors the Department’s published matrix and guidance. Retailers are responsible for accurate product coding to ensure proper tax collection after the July 1, 2025 effective date.

Source: Miss. Code Ann. § 27-65-17, as amended by HB 1 (2025) Source: Mississippi DOR Technical Bulletin Notice 72-25-03 (April 25, 2025)

NOTE: The legislative bill status/source citation above is currently unavailable at a working primary link (broken as of July 2026); the DOR notice link has been repaired as of this update. All statutory rates and scope were reconfirmed via Mississippi Department of Revenue Publications and the DOR's Sales Tax Rate Table as of this update. No material statutory or regulatory amendments found since the July 1, 2025 change.

Mississippi established an economic nexus regime for remote (out-of-state) sellers through regulation effective December 1, 2017. However, following the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc., the Mississippi Department of Revenue announced it would require remote sellers exceeding $250,000 in sales into Mississippi over any twelve-month period to register by August 31, 2018, and begin collecting use tax on sales made on or after September 1, 2018. The Department's guidance explicitly states: "Remote sellers registering by August 31, 2018, will begin collection for sales made on or after September 1, 2018."

This threshold is sales-based only; Mississippi does not impose a separate transaction-count requirement for economic nexus. The rule applies to sellers who purposefully or systematically exploit the Mississippi market via remote means. The $250,000 threshold is measured over the preceding twelve months.

Source: Mississippi DOR Guidance for Online Sellers (June 2018)

Not yet human confirmed—recommend review by Mississippi-specialist SALT professional to confirm context and alignment with later administrative publications.

Mississippi sales and use tax returns are due on or before the 20th day of the month following the end of the reporting period. If the 20th falls on a weekend or state-recognized holiday, returns and payments filed online or postmarked by the next business day are considered timely. The Mississippi Department of Revenue assigns each taxpayer's filing frequency—annual, quarterly, or monthly—based on sales volume evaluated by the Department. If the DOR notifies a taxpayer of a required change in filing frequency, taxpayers must comply starting with the immediately following period.

Vendor Discount: Practitioners should note that qualified filers may claim a vendor discount, but only for timely-filed and paid returns as outlined in DOR publications.

Penalties: Returns or payments not filed timely are subject to penalty and interest starting after the due date, regardless of whether the taxpayer files electronically or by mail.

Source: Mississippi DOR General Business Tax FAQ Source: Mississippi DOR Reporting Requirements

Mississippi requires marketplace facilitators to collect and remit sales and use tax on behalf of marketplace sellers for sales facilitated through their platforms, effective July 1, 2020. A marketplace facilitator is defined as any person who lists or advertises tangible personal property, services, or digital goods for sale and collects payment from customers. The collection requirement applies when the facilitator's sales into Mississippi exceed $250,000 in any consecutive twelve-month period. Third-party food delivery services delivering from unrelated restaurants are excluded.

Source: Miss. Code § 27-67-3 & § 27-67-11 (HB 379, 2020), Mississippi DOR Notice to Marketplace Facilitators

Mississippi law provides numerous sales tax exemptions, grouped into principal statutory categories. The main categories for most sales and use tax practitioners are summarized here. This list does not cover all specific exemptions in the code; practitioners should consult the full text of Miss. Code Ann. §§ 27-65-101 through 27-65-111 for comprehensive details.

1. Agricultural Exemptions (Miss. Code Ann. § 27-65-103) Includes, but is not limited to: sales of raw agricultural commodities (such as cotton and soybeans), livestock, seeds for planting, fertilizers, animal feed, and related supplies. Exemptions generally apply only when possession passes to the purchaser for qualifying use. Documentation: DOR guidance states sellers should keep records and invoices supporting each exempt sale. No uniform form appears required by the Department for all agricultural exemptions; primary sources emphasize accurate recordkeeping and showing the exemption as a deduction from gross sales. Source: Mississippi DOR Sales Tax Exemptions

2. Governmental Exemptions (Miss. Code Ann. § 27-65-105) Sales to the United States government, State of Mississippi, municipal corporations, qualified public schools, and certain other specified government entities are exempt. Purchases by contractors for use in government construction contracts are generally not exempt. Documentation: The DOR indicates that an official letter or certificate of exemption issued by the Department is typical, but language may vary. Sellers should retain whatever exemption proof is provided and document the identity of the exempt entity. Source: Mississippi DOR Sales Tax Exemptions

3. Industrial and Manufacturing Exemptions (Miss. Code Ann. § 27-65-101) Includes, but is not limited to: machinery, equipment, fuel, and supplies used directly in manufacturing or processing by a qualifying manufacturer. Not all purchases by manufacturers are exempt—only those items meeting specific statutory criteria. Documentation: DOR guidance often refers to certificates or direct pay permits for particular exemptions (e.g., machinery or construction materials). The type of documentation required may depend on the transaction; sellers should keep copies of any exemption documents received and record the nature and purpose of the purchase. Statutory and DOR sources do not set a single documentation method for all types. Source: Mississippi DOR Sales Tax Exemptions

4. Utilities/Consumption/Resale Exemptions (Miss. Code Ann. § 27-65-107) Certain sales of electricity, water, and other utility services are exempt or taxed at a reduced rate, typically based on use (e.g., agricultural irrigation, resale by a utility company, consumption by qualifying industry). Documentation: Supporting documents may include resale certificates, customer affidavits, or invoices specifying the qualifying use. No single form is required for every claim. Primary sources emphasize maintaining evidence sufficient to support the deduction. Source: Mississippi DOR Sales Tax Exemptions

5. Nonprofit/Health Care/Consumer Exemptions (Miss. Code Ann. § 27-65-111) Includes, but is not limited to: sales to some nonprofits (identified in statute), sales of prescription medicines, certain purchases during designated tax holidays, and other items enumerated in § 27-65-111. Most nonprofit exemptions require the organization to be specifically listed in statute or certified by DOR. Documentation: DOR generally expects exemption letters or certificates issued to the qualifying organization, but sellers should retain whatever proof is furnished and document the exempt purchaser and reason. When selling exempt medicines or during tax holidays, compliance with listed statutory conditions is required, usually shown on receipts or POS records. Source: Mississippi DOR Sales Tax Exemptions

Documentation Practices and Limitations: The DOR’s FAQ and published guidance emphasize that sellers must retain all documents and backup records substantiating exempt sales, but do not prescribe a universal form or document retention period for every exemption category. If DOR has issued a specific exemption letter, certificate, or other written proof, sellers should maintain a copy. Taxpayers should consult DOR guidance and FAQs for evolving practices, as documentation standards may change.

This summary’s categories are illustrative. Full exemption lists and requirements are detailed in Mississippi Code and DOR regulations. Source: Mississippi DOR Business Tax FAQs

Not yet human confirmed. Some documentation procedures may vary by transaction type and over time; where DOR guidance is silent, best practice is to retain all supporting records related to exempt sales.

Unable to confirm as of 2026-07-01.

Mississippi taxes the gross income from a detailed set of specifically enumerated services, as listed in Miss. Code § 27-65-23. Only services explicitly referenced in the statute are subject to sales tax. Categories of taxable services include:

• Air-conditioning installation or repairs
• Repair, maintenance, or servicing of automobiles, motorcycles, boats, or other vehicles
• Billiards, pool, or domino parlors and bowling alleys
• Burglar and fire alarm system installation and monitoring
• Car washing and detailing
• Computer software services performed in Mississippi
• Cotton compressing and warehousing
• Custom creosoting, treating, planing, or sawing of lumber
• Custom meat processing
• Electrical work, wiring, installation, or repair
• Elevator and escalator installation or servicing
• Film and photo development or finishing
• Machine shops, welding, foundry, or general repair
• Furniture repair and upholstering
• Grading, excavating, ditching, dredging, landscaping
• Hotels, motels, rooming houses, camps, and campgrounds
• Insulating services
• Jewelry/watch or clock repair
• Laundry, dry cleaning, pressing, or dyeing services
• Marina services
• Mattress renovation
• Repair of office/business machines
• Parking garages and lots
• Plumbing or pipe fitting
• Public storage warehouses (with storage-in-transit exceptions in subsection (2)(f))
• Refrigeration equipment repair
• Radio/TV installing or servicing
• Leasing or renting tangible personal property
• Geophysical services relating to water resources (not mineral exploration—see subsection (2)(g))
• Shoe repair
• Rental of storage lockers
• Telephone answering and paging
• Termite and pest control
• Tin and sheet-metal work
• Cable TV or similar system services
• Tire recapping, vulcanizing, or repairing
• Welding services
• Woodworking or wood-turning shops

Mississippi also provides reduced sales tax rates for certain narrowly defined services:

• 1% applies to certain services performed for electric power associations' transmission or distribution systems (subsection (2)(c)).
• 3% applies to specific railroad materials services (subsection (2)(d)).
• 4.5% applies to geophysical and mineral resource services not covered elsewhere (subsection (2)(g)).

A key exemption exists: repairs, reconditioning, or custom processing of tangible personal property are not taxed if the property is delivered outside Mississippi by the seller via common carrier or seller’s transport (see subsections (2)(h)-(i)).

For residential construction, the Mississippi Department of Revenue Technical Bulletin TB 72-501-17-02 clarifies that sales tax applies at 7% to the entire contract amount (labor plus material) for HVAC, electrical, grading, excavating, ditching, dredging, landscaping, insulating, and plumbing services, if listed in the statute.

Professional services—such as legal, accounting, medical, or architectural—are not listed as taxable and are therefore not subject to Mississippi sales tax unless expressly included by statutory amendment. The statute also does not list digital streaming, advertising, or general business consulting as taxable services as of this update.

Source: Miss. Code § 27-65-23; Mississippi DOR Technical Bulletin TB 72-501-17-02

Effective July 1, 2023, Mississippi imposes sales and use tax on "computer software" and "computer software services" when such services are performed or the software is hosted within Mississippi; however, software maintained on a server physically located outside Mississippi and accessible only via the Internet is expressly exempt from both sales and use tax under Mississippi Code as amended by Senate Bill 2449 (2023).

Classification and sourcing rules: Senate Bill 2449 (2023) amended Miss. Code §§ 27-65-3 and 27-65-19 to clarify:

• "Computer software" is taxable as tangible personal property, except for electronically stored or maintained data.
• "Computer software services" are taxable only when actually performed in Mississippi.
• Sales or use tax does not apply to computer software maintained on an out-of-state server accessed solely via the Internet by Mississippi users. This creates a location-based sourcing rule for SaaS: in-state hosted/serviced SaaS is taxable; SaaS hosted entirely out of state is not.
• For transactions involving mixed in-state and out-of-state use, the seller or purchaser may use a reasonable apportionment method (such as device counts, IP locations, or time spent) to determine the taxable Mississippi portion, with appropriate documentation or certification.

Department of Revenue guidance: Mississippi DOR Notice 72-23-12 (July 6, 2023) confirms: (a) the exemption for software hosted outside the state and accessed solely by Internet, and (b) allowance for reasonably documented apportionment for mixed-location transactions.

Source: Mississippi Senate Bill 2449 (2023) Source: Mississippi DOR Notice 72-23-12 (July 6, 2023)

Not yet human confirmed. Statutory and administrative authority are clear as to location-based rule and out-of-state server exemption as of July 2026. Substantive content unchanged; broken primary URLs replaced with current official versions as of this update.

Mississippi’s sales and use tax is primarily imposed at a 7% state rate on most retail sales of tangible personal property and explicitly taxed services per Miss. Code Ann. § 27-65-17(1)(a). However, several major categories of goods and services are subject to statutory reduced rates or exemptions. The following summarizes the most notable exceptions, with authority grounded in statute and the Mississippi Department of Revenue sales tax rate table as of June 2026.

Groceries (SNAP-eligible food and drink, effective July 1, 2025): Pursuant to HB 1 (2025 Regular Session), Miss. Code Ann. § 27-65-17(1)(g) is amended so that, effective July 1, 2025, retail sales of “eligible food and drink for human consumption” as defined by federal SNAP standards (7 U.S.C. § 2012(r)) are taxed at 5%. Hot foods, alcohol, and food for on-site consumption remain excluded. This is a prospective law change enacted as of 2025, reflected in both Mississippi DOR bulletins and the session law.

Utilities and energy supplied to manufacturers: Sales of electricity, natural gas, and other fuel to manufacturers for direct use in manufacturing are taxed at 1.5% per Miss. Code Ann. § 27-65-19(1)(a). For residential consumers, the general 7% rate continues to apply (see DOR sales tax rate table; no explicit statutory reduction for home energy use).

Prescription drugs: Sales of prescription medicines for human use are fully exempt from sales tax under Miss. Code Ann. § 27-65-111(f). Prosthetic and orthotic devices, insulin, and certain medical appliances are also addressed in § 27-65-111, but are exempt only to the extent enumerated and prescribed; the statute does not provide for a reduced (as opposed to zero) rate for such items unless stated.

Farm and agricultural equipment: Farm tractors and implements used directly in agricultural production are taxed at 1.5% pursuant to Miss. Code Ann. § 27-65-17(1)(e). Agricultural chemicals, seeds, and some irrigation equipment may receive reduced rates or exemptions; the Sales Tax Rate Table from DOR provides current classifications.

Machinery and equipment for manufacturing: Machinery and machine parts used directly in manufacturing are taxed at 1.5% per Miss. Code Ann. § 27-65-17(1)(e); natural gas, electricity, and other fuels used directly in manufacturing are also taxed at 1.5% per § 27-65-19(1)(a). These provisions may overlap depending on transaction details, but each statutory entry should be referenced for scope.

No broad reduced rate on general utilities, residential energy, or common services: Mississippi applies the standard 7% rate to residential electricity, natural gas, and utilities; only manufacturing/industrial users receive reduced rates by statute. The DOR’s Sales Tax Rate Table confirms this schedule.

Local option, tourism, and special rates: Some municipalities levy special hotel, restaurant, or tourism-related taxes not applicable to general retail sales—reference DOR local and tourism tax matrices for those rates and categories.

For precise and up-to-date itemization—including all specific products eligible for reduced or exempt rates—practitioners should consult the DOR’s Sales Tax Rate Table and review current session laws for changes. Statutory interpretation should follow the controlling citation listed for each product or service.

Source: Miss. Code Ann. § 27-65-17, as amended by HB 1 (2025) Source: Miss. Code Ann. § 27-65-19 Source: Miss. Code Ann. § 27-65-111 Source: Mississippi DOR Sales Tax Rate Table

Mississippi law excludes sales made through a marketplace facilitator from a remote seller’s calculation of the $250,000 economic nexus threshold. Under both statutory authority and Department of Revenue administrative guidance, a sale conducted by a marketplace facilitator is considered a sale of the facilitator—not of the individual marketplace seller—for purposes of determining economic nexus and registration obligations.

Statutory and regulatory background: House Bill 379 (2020), effective July 1, 2020, imposed comprehensive marketplace facilitator collection requirements and clarified the treatment of sales for nexus calculation. HB 379 defines a “marketplace facilitator” as a person or entity that contracts with sellers to facilitate taxable retail sales for delivery into Mississippi and collects payment from the purchaser.

Threshold calculation treatment: According to Mississippi Department of Revenue Notice 72-20-04 (June 25, 2020), “A sale made through a marketplace facilitator is considered a sale of the facilitator and not the sale of the marketplace seller for purposes of determining whether a person exceeds the $250,000 sales threshold.” This means a remote seller’s own $250,000 threshold calculation excludes marketplace-facilitated sales. Only the facilitator’s direct and facilitated sales are used to determine whether the facilitator is required to collect and remit Mississippi sales and use tax. If a remote seller also makes direct sales into Mississippi (outside of any marketplace), only those direct sales count toward the remote seller’s own economic nexus threshold.

Effective date: This rule applies to sales made on or after July 1, 2020. Prior years are governed by earlier law and guidance, which did not include this explicit exclusion.

Source: Mississippi DOR Notice 72-20-04 (Marketplace Facilitators, June 25, 2020) Source: Mississippi Legislature, H.B. 379 (2020) – Legislative Summary

Mississippi law imposes sales and use tax collection obligations on marketplace facilitators, not individual remote sellers, for sales made through a marketplace when both parties exceed the threshold.

Direct answer: If both a remote seller and a marketplace facilitator each exceed the $250,000 threshold in sales delivered into Mississippi, the obligation to collect and remit sales/use tax for marketplace-facilitated sales falls solely on the facilitator. The remote seller is not required to collect and remit tax on sales made exclusively through a registered marketplace facilitator platform.

Remote seller registration and reporting: Remote sellers making sales only through a complying marketplace facilitator—i.e., without any direct sales into Mississippi—are not required to register, collect, or remit Mississippi sales or use tax for those facilitated sales. The Department of Revenue and statutory text state that such sales are deemed sales of the facilitator, not the marketplace seller. There is no separate reporting obligation for remote sellers on marketplace-only sales if they do not otherwise meet threshold requirements via direct (non-marketplace) sales.

If a remote seller meets the economic nexus threshold through direct sales (not via a marketplace), they must register and collect/remit tax for those sales. If both direct and marketplace sales occur, only non-marketplace sales count toward the remote seller’s threshold and obligations; the facilitator handles the rest.

Authority background: House Bill 379 (effective July 1, 2020) and DOR Notice 72-20-04 provide:

• A sale through a marketplace facilitator counts only toward the facilitator’s threshold; facilitated sales are not included in the remote seller’s $250,000 calculation.
• The facilitator is exclusively responsible for tax remittance on those sales if registered.
• There is no secondary registration or reporting burden on marketplace-only remote sellers.

Source support: Source: Mississippi DOR Notice 72-20-04 (Marketplace Facilitators, June 25, 2020) Source: Mississippi Legislature, H.B. 379 (2020)

Caution / review status: Not yet human confirmed. Mississippi DOR guidance is clear as of June 2026; practitioners should verify compliance for any change after that date or specific scenarios not expressly covered in the cited sources.

Direct answer:

Mississippi requires sellers to verify and retain proper exemption documentation, including resale certificates, for all exempt sales.

• Dealers must obtain and maintain a copy of the purchaser’s valid Mississippi Sales Tax Permit or Resale Certificate for any sale made tax-exempt for resale. Acceptable evidence includes photocopies, images, or facsimiles of the permit or official certificate.
• The exemption documentation must be kept on file for a minimum of four years from the date of sale. This reflects the Department of Revenue’s updated guidance as of 2024, which now recommends a four-year minimum retention period (up from three years previously). The requirement applies to all sales claimed as exempt, not only resale transactions, and includes exemption certificates for charitable, governmental, manufacturer, and agricultural purchases.

Verification:

• Sellers must exercise "good faith" in accepting exemption documentation. This means ensuring the certificate is properly completed, matches the type of goods sold, and is valid for the period covering the sale. Misuse or acceptance without sufficient review may cause the seller to become liable for uncollected tax.
• For resale exemptions, the permit must be from the State of Mississippi (not another state), unless specifically authorized (e.g., certain intergovernmental sales).

Expiration/renewal:

• Mississippi does not currently require periodic renewal or re-execution of exemption certificates for individual repeat purchasers, but best practice is to refresh permits or certificates if the Department issues a new one or the customer changes business format.

Audit approach:

• On audit, the Department of Revenue routinely requests all documentation supporting exempt sales, specifically expecting a valid resale permit or exemption certificate attached to each transaction. Sales lacking proper documentation are presumed taxable.

Record retention enforcement:

• Dealers unable to produce exemption documentation during an audit are assessed tax as if the transaction was taxable, plus applicable interest and penalties.

Record retention period (updated):

• The Department of Revenue FAQ and updated guidance now specify a four-year minimum retention period for sales tax records, superseding prior three-year references. Practitioners should consider retaining records for at least four years, and longer as suggested for audit protection.

Legal authority:

• Mississippi Code § 27-65-43 (retention and examination of records).
• Mississippi Admin. Code 35.IV.3.01(300) (dealer recordkeeping, including exemption evidence).
• Mississippi DOR: "Record Keeping & Document Retention."
• Mississippi DOR: "Business Tax Frequently Asked Questions."

Source: Mississippi DOR “Record Keeping & Document Retention” Source: Mississippi DOR Business Tax FAQs Source: Miss. Admin. Code 35.IV.3.01(300) Source: Miss. Code Ann. § 27-65-43

Not yet human confirmed. As of July 2024, the Department of Revenue guidance reflects a 4-year minimum retention period. Practitioners should monitor for further DOR bulletins or procedural changes regarding electronic documentation and exemption certificate procedures.