Republican Governor Signs Bill To Phase Out State Income Tax

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Mississippi Gov. Tate Reeves signed legislation to eliminate the state’s income tax.

“We did it, Mississippi! We just eliminated the income tax!” Reeves said.

“Today, I was proud to sign into law a complete elimination of the individual income tax in the state of Mississippi. Let me say that again: Mississippi will no longer tax the work, the earnings, or the ambition of its people,” he added.

Full statement:

We did it, Mississippi! We just eliminated the income tax!

Today is a day that will be remembered — not just for the headlines, not just for the politics, but for the profound, generational change it represents.

Today, I was proud to sign into law a complete elimination of the individual income tax in the state of Mississippi. Let me say that again: Mississippi will no longer tax the work, the earnings, or the ambition of its people.

This is more than a policy victory. This is a transformation. And it’s a transformation that I have believed in, fought for, and worked toward for many years. From my days as lieutenant governor to my first campaign for this office — and every legislative session since — I have made this my mission.

Because I believe in a simple idea: that government should take less so that you can keep more. That our people should be rewarded for hard work, not punished. And that Mississippi has the potential to be a magnet for opportunity, for investment, for talent — and for families looking to build a better life.

The legislation I signed puts us in a rare class of elite, competitive states. There are only a handful of states in the country that do not tax income. Today, Mississippi joins their ranks — and in doing so, we plant our flag.

We are saying to job creators across America: if you want to build, come to Mississippi.

We are saying to families across the South: if you want to grow, come to Mississippi.

We are saying to entrepreneurs, to workers, to dreamers: Mississippi is open for business — and we won’t penalize your success.

We are going to compete — and we’re going to win.

Now, I want to be clear: this didn’t happen overnight. And it didn’t happen alone. This day is the result of years of work by dedicated leaders who shared the vision and had the courage to act.

I want to thank Speaker Jason White and Lieutenant Governor Delbert Hosemann. I want to give special thanks to Speaker White because he worked his tail off to get this done. I also want to thank House Ways and Means Chairman Trey Lamar and all the members of the House and Senate who rolled up their sleeves and got this done. We debated. We negotiated. We stayed focused on the goal. And we got it across the finish line — together.

To the people of Mississippi: you are the real winners today. This law means more money in your pocket. It means more jobs in your town. It means a future with more opportunity for your children and grandchildren.

The work of your hands belongs to you. It is yours — to feed your family and invest in your home and your community.

Because that’s what this is ultimately about. Not just numbers on a balance sheet, but lives. Generations from now, when our kids are raising families of their own in a stronger, more prosperous Mississippi, they will look back on this moment and say: this is when we took our shot.

This is when we bet on ourselves. This is when we really broke from the pack. This is when we took bold action — and it paid off.

There are moments in a state’s history that mark a turning point. A moment where the past gives way to the future. Where we rise above the old ways of doing things — and chart a bold new course… this is one of those moments.

The elimination of the income tax is not just a win for our economy. It’s a win for freedom. A win for families. A win for the idea that Mississippi can lead — that we will lead — in the century to come.

And I believe with all my heart that we will look back on this day as a turning point, a generational victory, and a proud legacy we leave for those who come after us.

Fox News reports:

Mississippi taxpayers will get significant relief with the incremental elimination of the state’s income tax.

Republican Gov. Tate Reeves is signing legislation into law Thursday evening that will lower that tax from 4.7% to nothing over the next few years, including getting it down to 3% by 2030, then eventually down to zero.

House Bill 1, the “Build Up Mississippi Act,” also slashes the grocery tax to 5% from 7%.

“I am proud to sign into law a complete elimination of the individual income tax in the state of Mississippi,” Reeves said in a statement.

“Let me say that again: Mississippi will no longer tax the work, the earnings or the ambition of its people. The legislation I’m signing today puts us in a rare class of elite, competitive states. There are only a handful of states in the country that do not tax income. Today, Mississippi joins their ranks, and, in doing so, we plant our flag.”

Proponents of the legislation believe it will help boost economic development in the state. Only nine states do not charge an individual income tax: Tennessee, Florida, South Dakota, New Hampshire, Nevada, Wyoming, Alaska, Washington, and Texas.

Per Mississippi Today:

Mississippi is currently reducing its income tax rate to 4% from a previously passed tax cut being phased in. Beginning in 2027, the new law will reduce that rate by .25% over four years until it reaches 3%. In 2031, the tax will only be reduced if certain revenue “growth triggers” are met.

The law also reduces the sales tax on groceries from 7% to 5%, raises the gasoline tax from 18.4 cents a gallon to 27.4 cents a gallon over three years to fund infrastructure and changes the contribution model of the public employee retirement system.

House leaders have long pushed to eliminate the state personal income tax in relatively short order. The Senate had urged a longer-term approach, arguing it would be unwise to slash a third of the state’s revenue in uncertain economic times. Senators last week had conceded to eliminate the income tax, but only with economic growth “triggers” as safeguards — the tax wouldn’t phase out unless the state saw robust economic growth and controlled spending. It would have likely taken many years.

Or so they thought. The Senate bill had typos that essentially nullified the growth triggers and would eliminate the income tax nearly as quickly as the House proposed. The House passed the flawed bill on to the governor, who signed it into law Thursday.



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