The two highest elected officials in the Mississippi Legislature have both now committed a handful of lawmakers to studying the feasibility of tax cuts in the 2025 Session.
On Tuesday, Republican Lt. Gov. Delbert Hosemann created the Senate's third off-season committee to study tax and fiscal policies with the goal of reducing tax burdens on Mississippians. In the past, Hosemann has voiced support for reducing Mississippi's 7% grocery tax, which is the highest food tax in the nation.
Mississippi is one of 13 states to have a grocery tax. In comparison, neighboring states such as Arkansas, Alabama and Tennessee have grocery taxes set at 0.125%, 3% and 4%, respectively. The second highest grocery tax behind Mississippi is Idaho, which taxes at 6%, according to a 2024 study conducted by the American Association of Retired Persons.
“Our ultimate goal is always to lower the tax burden and ensure taxpayer dollars stay in taxpayer pockets,” Hosemann said. “This requires Appropriations and Finance leadership to be at the table looking at all income and expenses to ensure we are being as efficient as possible while fully funding necessary services.”
The study committee will likely hold hearings in the fall and will focus not only on taxes, but also tax credits, state bonds, diversions and other issues related to state revenues and expenses. A date for the hearing has not yet been set.
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If Hosemann were to come out in support of a bill to cut or phase down the personal income tax, it would be a public change. In March, Hosemann, as well as Finance Committee Chairman Josh Harkins, R-Flowood, both said the Legislature should wait until the personal income tax phasedown, which was passed in 2022, is fully implemented in 2026.
"Last term, the Legislature implemented the largest tax cut in Mississippi history," Hosemann said in March. "We anticipate reviewing the income tax rate again once this cut is completely phased in. Right now, Mississippi’s income tax rate is extremely competitive across the nation.”
In 2022, the Legislature enacted the largest tax cut in state history. Once fully phased in it will reduce the top taxation rate from 5% to 4%, and the total tax cut will eliminate an estimated $524 million in recurring revenue.
Hosemann's announcement Tuesday also comes just a few months after House Speaker Jason White, R-West, announced his own tax cut committee to study the feasibility of eliminating the personal income tax and cutting the grocery tax in half.
"We'd like to get some method to move away from the personal income tax and more toward consumption tax," White told the Clarion Ledger in May. "(We want to) look at all tax credits that are out there and the special exemptions and those kinds of things and see the best way to run state government on people's money going forward."
Also on Tuesday, White announced a summit on Sept. 24 that will focus specifically on tax reform. The event will feature speakers such as Gov. Tate Reeves, White and several House members, as well as tax experts. The event will also feature discussion on better funding the Mississippi Department of Transportation.
"This Policy Summit is another step in the House’s commitment to building Mississippi up to have the most appealing tax structure in the nation”, White said. “It is the vision of the House of Representatives that we accelerate our pathway to eliminating the personal income tax so that we reward Mississippians’ hard work, not tax it."
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White's committee also has planned a hearing on Wednesday in the Mississippi State Capitol at 1 p.m.
With both chambers now studying the idea of reforming tax policy, it makes it very likely to become a key focus of the 2025 Session. If the Senate and House cannot agree on an approach to tax reform, the Legislature could end up passing a compromised version or pass nothing at all.
Grant McLaughlin covers state government for the Clarion Ledger. He can be reached at gmclaughlin@gannett.com or 972-571-2335
This article originally appeared on Mississippi Clarion Ledger: MS Senate, House looking at tax reform in 2025. Could grocery and income taxes both be cut?
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