Mississippi Income Tax for Business Owners: Phase-Out to 3%, Corporate Brackets and Pass-Through Entities
Mississippi Income Tax for Business Owners: Phase-Out to 3%, Corporate Brackets and Pass-Through Entities
Mississippi is cutting its individual income tax on a fixed statutory schedule, and the rate on taxable income above $10,000 is scheduled to reach 3% by 2030. For business owners, the rate is only part of the picture. Your entity choice decides whether profit lands on your personal return or on a corporate return, and that choice drives how much Mississippi tax you pay. This guide covers the current Mississippi income tax rate, the phase-out, corporate brackets, franchise tax, and how pass-through income is reported.
This is informational content, not legal or tax advice. Confirm every figure with the Mississippi Department of Revenue (DOR), and work with a CPA or attorney before you choose a business structure.
Mississippi income tax rate 2026
For tax year 2026, Mississippi taxes the first $10,000 of taxable income at 0% and taxable income above $10,000 at 4%. That 4% rate applies to sole proprietors, to single-member LLCs that report on the owner's personal return, and to owners of pass-through entities on their share of business profit.
Mississippi income tax phase out to 3%
The rate above $10,000 falls each year under Miss. Code 27-7-5, as amended by 2025 HB 1:
| Tax year | Rate on taxable income above $10,000 |
|---|---|
| 2025 | 4.4% |
| 2026 | 4% |
| 2027 | 3.75% |
| 2028 | 3.5% |
| 2029 | 3.25% |
| 2030 and later | 3% (scheduled floor) |
Treat 3% as the scheduled floor, not a settled end point. From 2031, further cuts depend on a revenue and reserve-fund trigger. Bills in the 2026 session that would have rescinded or paused the cuts did not pass, so the schedule above is the one to plan around. Check DOR's website for the rate in effect for the year you file.
Here is what the schedule means in practice. Assume your business produces $60,000 of taxable income. At the 2026 rate, the state tax on that income is 4% of $50,000, or $2,000. At the 2030 rate, it is 3% of $50,000, or $1,500. That is $500 a year less on the same income, before credits, adjustments, or deductions that change your actual result. Run your own numbers on DOR's forms.
Mississippi corporate income tax brackets and corporate tax rate
A C corporation, or an LLC that elects to be taxed as a corporation, does not use the individual rate. The Mississippi corporate tax rate is a bracket schedule, and it applies to the corporation's own taxable income:
- 0% on the first $5,000 of taxable income
- 4% on the next $5,000, which is income from $5,001 to $10,000
- 5% on taxable income above $10,000
Example: a corporation with $100,000 of taxable income owes $0 on the first $5,000, $200 on the next $5,000, and $4,500 on the remaining $90,000. That totals $4,700 in Mississippi corporate income tax before franchise tax.
Franchise tax: corporations only, and repealed after 2027
Franchise tax is separate from income tax, and it applies to corporations. An LLC taxed as a partnership does not pay it. An LLC taxed as a corporation does.
For tax year 2026, the franchise tax is $0.50 per $1,000 of capital in excess of $100,000, with a $25 minimum. For 2027 the rate drops to $0.25 per $1,000, and the tax is repealed effective January 1, 2028. Capital is computed under DOR's franchise tax instructions, so check the form before you estimate. Example: a corporation with $300,000 of capital has $200,000 in excess of $100,000. That owes $100 for 2026 ($0.50 times 200), and $50 for 2027 at the lower rate, if its capital stays the same.
Pass-through entities: where the income is taxed
An LLC taxed as a partnership and an S corporation are pass-through entities. Their income passes through to each owner's individual return, where it is taxed at the individual rate for that year. A single-member LLC that is disregarded for federal tax purposes works the same way, and its income is reported on the owner's return.
Because the tax classification controls which return the income lands on, confirm your LLC's federal classification and any S election with your CPA before your first filing. Changing it later can have tax consequences of its own.
Mississippi pass-through entity tax and PTE election: confirm before you plan around it
Searches for a Mississippi pass-through entity tax, or a Mississippi PTE election, are common because many states offer one. This guide could not confirm a Mississippi PTE election. That includes who qualifies, how the election is made, the deadline, and how any entity-level payment is calculated. Do not assume you can make one, and do not build a plan around it until DOR confirms the rules for the year you file. Ask DOR directly through dor.ms.gov, and ask your CPA whether an election would change your result given your owners and income.
How to estimate your Mississippi tax as a business owner
- Confirm your entity's federal tax classification: sole proprietor, disregarded single-member LLC, partnership, S corporation, or C corporation.
- Estimate taxable income for the year. For pass-through owners, that is your share of business profit after deductions.
- Apply the individual rate for that tax year from the phase-out table, or the corporate brackets if the entity is taxed as a corporation.
- For a corporation or an LLC taxed as one, add franchise tax using the capital figure from DOR's instructions.
- Check the rate and the forms on DOR's website, then confirm the result with your CPA.
Choosing an entity with Mississippi tax in mind
- Sole proprietor or single-member LLC: profit is taxed on your individual return at 4% above $10,000 for 2026.
- Multi-member LLC taxed as a partnership: each owner reports a share of income on an individual return. Confirm the partnership's own filing obligations with DOR.
- S corporation: profit passes through to the owners, who pay the individual rate on their share.
- C corporation or LLC taxed as a corporation: corporate brackets apply, plus franchise tax for tax years through 2027. Dividends paid to owners are reported on their personal returns, so model that second layer before choosing this structure.
Formation filings and fees that sit alongside income tax
Entity filing costs are separate from income tax. An LLC Certificate of Formation (Form F0100) costs $50 and is filed through the Secretary of State's online portal. The LLC annual report has no fee, is due April 15 each year, and must be filed online. A corporate annual report costs $25 and is due April 15 for profit corporations.
Mississippi has no state general business license, so forming an entity is a registration, not a license. Cities issue their own privilege licenses under Miss. Code 27-17, and counties license only businesses outside municipalities. A fictitious (assumed) business name is filed with the Secretary of State for $25, not with the county. Confirm the privilege license requirement with your city before you open.
Where to file and get help
Income and franchise tax forms, instructions, and filing access through TAP are on the Mississippi Department of Revenue website at dor.ms.gov. Entity filings go through the Secretary of State's Business Services Division at sos.ms.gov/business-services. For counseling on business structure and recordkeeping, the Mississippi Small Business Development Center Network has 19 locations and is hosted by the University of Mississippi at mississippisbdc.org.
Frequently asked questions
Is the Mississippi income tax rate the same for LLC owners and corporations?
No. Owners of pass-through entities pay the individual rate on their share of profit. A corporation, or an LLC taxed as one, pays the corporate brackets plus franchise tax for tax years through 2027.
Will my rate fall in 2027?
On the current schedule, the rate above $10,000 falls to 3.75% for tax year 2027. Confirm that with DOR, because rates after 2030 depend on future statute.
Does Mississippi have a general business license?
No state general business license exists. Check with your city or county for a privilege license, and with the relevant state board for any occupational or industry license.
This guide is informational, not legal or tax advice. Rates and schedules are set by statute and can change. Talk with a qualified CPA or attorney before you choose an entity, make an election, or file if you have multi-state owners or unusual income.
Official resources
- Mississippi Department of Revenue: https://www.dor.ms.gov/
- Mississippi Secretary of State, Business Services Division: https://www.sos.ms.gov/business-services
- Mississippi Small Business Development Center Network: https://www.mississippisbdc.org/