Legislature weighing tax reforms, including a change to Mississippi’s tax on food (07/29/24)

JACKSON, Miss. (WLBT) - A recent study by SmileHub named Mississippi the least supportive state for people living in poverty.

It’s the poorest state but charges the most tax on food.

Mississippi taxes food at 7 percent, the highest rate in the nation. A $200 grocery bill will cost $14 extra.

It’s an issue that’s come up at the State Capitol for years. Several bills have been filed but haven’t made it across the finish line. But there seems to be some new traction on the possibility of reducing the tax.

Rep. Scott Bounds is co-chairing the House Select Committee on tax reform.

“That’s tax relief for the citizens, but we’ve got to be sure that we’re not cutting off our nose to spite our face,” said Bounds.

He says it will require a look at the tax structure because it’s a financial balancing act.

“Obviously, it would impact state revenues depending on what mechanism or what structure we use if we did a grocery tax reduction,’ added Bounds.

Speaker Jason White spoke in detail about his desire to see tax reform in 2025 shortly after the end of this year’s session.

“We’re gonna look at the way we divert to cities because the grocery tax is the number one sales tax generator for most medium and small towns,” said White. “And so you start eliminating the grocery tax, that is a large portion of the sales tax that happens inside the city limits and lots of our smaller towns and cities.”

That’s among the issues being weighed by the select committee.

“You know, we can’t just yank a revenue stream out from under them that they are beginning or have already budgeted for the next fiscal year, in their fiscal year or in the process of getting ready to budget for,” said Bounds. “So, the big thing is we’ve got to keep them whole.”

Tax reform discussions in the House are also set to include elimination of the income tax. But that’s a step the Senate counterparts have seemed less inclined to back in previous sessions.

The tax reform select committee has had an initial meeting but asked that members go back and think about ways to reform the tax structure. More meetings will be held in the next five months ahead of the session beginning in January.