Get your tax IDs in Mississippi

An EIN, if you need one, takes minutes online. Mississippi then adds a sales tax permit if you sell taxable goods or taxable services, withholding if you pay wages, and an unemployment account once you owe the tax. Franchise tax is a separate yearly tax on the corporation itself. It is on its way out.

What’s different in Mississippi

• The sales tax permit has no fee, and you need it before you sell. Groceries that qualify for SNAP are taxed at 5%, not the general 7%².
• County sales tax is not added on top. Two city levies and none at the county level: an extra .25% in Tupelo, and an extra 1% on certain retail sales in Jackson. Many counties and municipalities have additional taxes on food, beverages, and accommodations⁴.
• An LLC follows its federal classification. An S corporation still pays franchise tax at the company.
• Individual rates and corporate rates are not the same schedule. The individual rate steps down. The corporate brackets on the business FAQ do not.
• A new employer’s unemployment rate rises for three years. It starts at 1%¹⁰.

Do this

1. Get an EIN from the IRS if you need one. It is free and, if approved, issued immediately¹¹ online. A corporation, LLC, or partnership uses that number when it registers in Mississippi. Don’t pay a website to apply for you.
2. Register in TAP for the taxes that apply. TAP is where you open a sales tax permit and a withholding account. A business with no permanent place of business in Mississippi has to post a sales tax bond or an approved surety cash bond before the permit is issued¹. A history of late sales tax can mean you pay what is owed, post a bond, or both, before a new sales tax permit is issued⁴. The pages do not print the bond amount.* Read the figure on the application.
3. If you will collect sales tax, get the permit before you open. There is no fee for a sales tax permit. You need the permit before you begin or operate a business that must collect sales tax. The permit should arrive by mail within 2 weeks after the application is complete and approved⁴. Once issued, it does not expire and does not require renewal while the holder continues the same business at the same location³. Filing and paying sales-tax returns remain separate obligations.
4. Look up the rate for what you sell, and the city where you sell it. The state piece is below. Many counties and municipalities have additional taxes on food, beverages, and accommodations⁴. The department keeps a list of those local taxes. Read it for your city before you program a register.
5. File sales tax by the 20th on your assigned schedule. Returns are due the 20th day of the month after the reporting period. A weekend or holiday moves the due date to the next business day. File a return for every period, even when you had no sales. Generally, a retailer whose average liability is $300 or more a month files monthly. A smaller liability may file quarterly. The department reviews this every year and tells you if it changes. Pay by the 20th and the discount is 2%, capped at $50⁴.
6. If you sell into Mississippi from outside the state, read the $250,000⁴ rule before you collect anything. Over that amount in any twelve-month period, you have to register and collect. The FAQ states the threshold. It does not say which sales are left out of the count.* Use the department’s out-of-state seller notice if you are close to the line.
7. Register for withholding when you pay wages for work in Mississippi. Returns are due the 15th day of the month after the period. A weekend or legal holiday moves it to the next business day. Generally monthly when the average withholding is $300 or more a month, and quarterly when it is smaller. The department tells you which one you have. Employees use Mississippi Form 89-350⁴. W-2s are due January 31, both to the employee and to the Department of Revenue⁸. The hiring guide covers the federal side.
8. Open an unemployment account when you are liable. The tests are below. Reports are due the last day of the month after the quarter: April 30, July 31, October 31, and January 31. A weekend moves the date to the next business day¹².

Rates and income tax

State sales tax, from the rates page:

• 7%² on most retail sales of tangible personal property.
• 5%² on groceries that can be bought with SNAP benefits.
• Other rows are lower, including farm implements, manufacturing machinery, and some vehicles. Use the row for what you actually sell.

Two city levies and none at the county level: an extra .25% in Tupelo, and an extra 1% on certain retail sales in Jackson. Many counties and municipalities have additional taxes on food, beverages, and accommodations⁴.

Construction is a different tax. 3.5% applies to non-residential work over $10,000. If the contract is over $75,000, or the contractor is from another state, the contractor's tax is paid before work begins unless a surety bond is on file. Apartments and condominiums are not residential for the contractor's tax. Work on a house pays the regular 7% on materials and taxable services⁴. The contractor license, which is a different requirement, is on Licenses and permits.

Late sales tax can be 10% of the late or deficient tax, interest of one-half of 1% a month, or both, when the shortfall is from negligence or a failure to comply⁴.

Individual income tax, from the general information page, is 0% on the first $10,000⁵. Above that:

• Tax year 2025, the return people file in 2026, is 4.4%⁵.
• Tax year 2026, the year a business opening now is earning, is 4%⁵.
• Tax year 2027 is 3.75%⁵.

The 2025 resident instructions, under House Bill 1, continue the table: 3.5% for 2028, 3.25% for 2029, and 3% for 2030 and after. Starting in calendar year 2031, a further cut below 3% is possible only if a reserve-fund test is met. It is not a rate you can use yet⁶. This page does not compute anyone’s tax.

A C corporation pays 0% on the first $5,000, 4% on the next $5,000, and 5% on taxable income over $10,000. There is no minimum corporate income tax. The return is due on or before the 15th day of the 4th month after the year ends. An inactive corporation still files until the Secretary of State shows it is dissolved or withdrawn⁴.

An LLC taxed as a partnership federally files as a pass-through entity in Mississippi. An LLC taxed as a corporation federally files as a corporation for Mississippi income and franchise tax. A pass-through return is due on or before the 15th day of the 3rd month after the year ends⁴.

An S corporation files as a pass-through entity. Shareholders pay the income tax. The S corporation still pays franchise tax. A nonresident with no other Mississippi interest may be included on a composite return. Once that choice is made, the taxpayer must keep filing that way⁴. The federal election is Form 2553¹³. This page does not tell you to make it.

Franchise tax for a tax year that begins in 2026 is $0.50 per $1,000 of capital employed over $100,000, or over the assessed value of property in the state if that is greater, and not less than $25⁴. It is phased out over a nine-year period ending with tax year 2027. The 2025 corporate instructions say it is repealed effective January 1, 2028⁷.

Estimated tax is required when the year’s income tax is over $200. An extension gives more time to file. It does not give more time to pay⁴.

Unemployment

Register with the Mississippi Department of Employment Security when you meet a test. For a commercial employer, that is $1,500 of wages in a calendar quarter, or one worker in some part of a day in each of 20 different weeks in a year. Household employers have a separate test, $1,000 of wages in a calendar quarter⁹. Farm employers and 501(c)(3) employers have their own tests on that page.

A startup’s rate is 1% in the first year of liability, 1.1% in the second, and 1.2% from the third year on. Those rates do not include a Workforce Investment and Training contribution that might apply¹⁰. The rates page does not give the training rate.* Ask MDES for it before you budget the tax. The wage base is the first $14,000¹⁴ paid to each employee in the year.

Buying a business that is already liable can put you on that business’s rate immediately. It may be higher or lower than the new-employer rate.

What you get back

An EIN if you applied, a sales tax permit if you will collect the tax, a withholding account if you will have employees, and an unemployment account once you are liable. The permit is not a city license. That is the next step.