House passes income tax elimination bill
Members of the Mississippi House of Representatives this week passed House Bill 1, what Speaker of the House Jason White calls the “Build Up Mississippi Act,” in the Mississippi House of Representatives. If enacted it would put into effect a plan to eliminate the state income tax, which is one of Gov. Tate Reeves’ priorities for the 2025 legislative session.
“Today, the Mississippi House of Representatives took a transformative positive step by passing House Bill 1, the Build Up Mississippi Act, with bipartisan support,” Speaker White said in a news release. “This crucial legislation paves the way for a brighter economic future for our state, delivering a comprehensive tax reform package designed to uplift Mississippians, support our infrastructure and PERS system, and empower local governments.
Under HB 1, every municipality will receive more funding under the local option, 1.5 percent sales tax, than the current diversion. With Build Up Mississippi’s proposed consumption-based model, Mississippi will maintain a lower sales tax and remain more competitive than our surrounding states. The bill also revises exemptions for motor fuel sales to include a retail fuel sales tax of five percent; this modest sales tax aims to enhance revenue for the Maintenance and Capacity Projects Fund at MDOT.
White said $100 million of revenue from lottery proceeds will be redirected towards a commitment to a stable retirement plan for our state employees which showcases our unwavering determination to build a stronger Mississippi. The remaining lottery proceeds will be allocated for the Education Enhancement Fund and Multi Modal Transportation: our state’s ports, harbors, airports, rails, and transit system. By prioritizing essential services and safeguarding the PERS system, we are investing in the long-term well-being of our communities and reinforcing confidence in our state’s economic stability.
“With the passage of HB 1 in the House, we have taken a monumental step towards enacting the largest tax cut in Mississippi’s history,” White said. “This is a powerful message that we prioritize the quality of life for all our citizens while laying the groundwork for a thriving economy that will uplift generations to come.”
The bill now goes to the state Senate for consideration. The vote on House Bill 1 can be found here.
