Sales tax; exempt certain agricultural and logging items.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Whaley, Berry, Rhodes, Tate,
McMahan, Chassaniol, Younger, Ladner, Taylor,
Seymour, McLendon, Suber, Carter, Michel,
McCaughn, Blackwell

SENATE BILL NO. 2272

AN ACT TO AMEND SECTIONS 27-65-17 AND 27-65-103, MISSISSIPPI 1
CODE OF 1972, TO EXEMPT FROM THE STATE SALES TAX RETAIL SALES OF 2
CERTAIN AGRICULTURAL AND LOGGING ITEMS FORMERLY TAXED AT THE RATE 3
OF 1.5%; TO EXEMPT FROM THE STATE SALES TAX RETAIL SALES OF 4
LIVESTOCK FENCING MATERIALS AND AGRICULTURAL LIME, WHEN MADE TO 5
COMMERCIAL FARMERS FOR AGRICULTURAL PURPOSES; TO DIRECT THE 6
DEPARTMENT OF REVENUE TO ESTABLISH AN APPLICATION PROCESS FOR A 7
COMMERCIAL FARMER'S PERMIT TO BE ISSUED; AND FOR RELATED PURPOSES. 8
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 9
SECTION 1. Section 27-65-17, Mississippi Code of 1972, is 10
amended as follows: 11
27-65-17. (1) (a) Except as otherwise provided in this 12
section, upon every person engaging or continuing within this 13
state in the business of selling any tangible personal property 14
whatsoever there is hereby levied, assessed and shall be collected 15
a tax equal to seven percent (7%) of the gross proceeds of the 16
retail sales of the business. 17
(b) * * * [Deleted.] 18
(c) * * * [Deleted.] 19
(d) Except as otherwise provided in subsection (3) of 20
this section, retail sales of aircraft, automobiles, trucks, 21
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truck-tractors, semitrailers and manufactured or mobile homes 22
shall be taxed at the rate of three percent (3%). 23
(e) Sales of manufacturing machinery or manufacturing 24
machine parts when made to a manufacturer or custom processor for 25
plant use only when the machinery and machine parts will be used 26
exclusively and directly within this state in manufacturing a 27
commodity for sale, rental or in processing for a fee shall be 28
taxed at the rate of one and one-half percent (1-1/2%). 29
(f) Sales of machinery and machine parts when made to a 30
technology intensive enterprise for plant use only when the 31
machinery and machine parts will be used exclusively and directly 32
within this state for industrial purposes, including, but not 33
limited to, manufacturing or research and development activities, 34
shall be taxed at the rate of one and one-half percent (1-1/2%). 35
In order to be considered a technology intensive enterprise for 36
purposes of this paragraph: 37
(i) The enterprise shall meet minimum criteria 38
established by the Mississippi Development Authority; 39
(ii) The enterprise shall employ at least ten (10) 40
persons in full-time jobs; 41
(iii) At least ten percent (10%) of the workforce 42
in the facility operated by the enterprise shall be scientists, 43
engineers or computer specialists; 44
(iv) The enterprise shall manufacture plastics, 45
chemicals, automobiles, aircraft, computers or electronics; or 46
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shall be a research and development facility, a computer design or 47
related facility, or a software publishing facility or other 48
technology intensive facility or enterprise as determined by the 49
Mississippi Development Authority; 50
(v) The average wage of all workers employed by 51
the enterprise at the facility shall be at least one hundred fifty 52
percent (150%) of the state average annual wage; and 53
(vi) The enterprise must provide a basic health 54
care plan to all employees at the facility. 55
A medical cannabis establishment, as defined in the 56
Mississippi Medical Cannabis Act, shall not be considered to be a 57
technology intensive enterprise for the purposes of this paragraph 58
(f). 59
(g) Sales of materials for use in track and track 60
structures to a railroad whose rates are fixed by the Interstate 61
Commerce Commission or the Mississippi Public Service Commission 62
shall be taxed at the rate of three percent (3%). 63
(h) Sales of tangible personal property to electric 64
power associations for use in the ordinary and necessary operation 65
of their generating or distribution systems shall be taxed at the 66
rate of one percent (1%). 67
(i) Wholesale sales of food and drink for human 68
consumption to full-service vending machine operators to be sold 69
through vending machines located apart from and not connected with 70
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other taxable businesses shall be taxed at the rate of eight 71
percent (8%). 72
(j) Sales of equipment used or designed for the purpose 73
of assisting disabled persons, such as wheelchair equipment and 74
lifts, that is mounted or attached to or installed on a private 75
carrier of passengers or light carrier of property, as defined in 76
Section 27-51-101, at the time when the private carrier of 77
passengers or light carrier of property is sold shall be taxed at 78
the same rate as the sale of such vehicles under this section. 79
(k) Sales of the factory-built components of modular 80
homes, panelized homes and precut homes, and panel constructed 81
homes consisting of structural insulated panels, shall be taxed at 82
the rate of three percent (3%). 83
(l) Sales of materials used in the repair, renovation, 84
addition to, expansion and/or improvement of buildings and related 85
facilities used by a dairy producer shall be taxed at the rate of 86
three and one-half percent (3-1/2%). For the purposes of this 87
paragraph (l), "dairy producer" means any person engaged in the 88
production of milk for commercial use. 89
(m) Sales of equipment and materials used in connection 90
with geophysical surveying, exploring, developing, drilling, 91
redrilling, completing, working over, producing, distributing, or 92
testing of oil, gas and other mineral resources shall be taxed at 93
the rate of four and one-half percent (4-1/2%). Operators that 94
rebill sales of equipment and materials to nonoperating working 95
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interest owners on behalf of a joint account through the joint 96
interest billing (JIB), where the sales tax has been paid or 97
accrued by the operator shall not be charged a sales tax on the 98
JIB as services income. 99
(n) Retail sales of food or drink for human consumption 100
not purchased with food stamps issued by the United States 101
Department of Agriculture or other federal agency, but which would 102
be exempt under Section 27-65-111(o) from the taxes imposed by 103
this chapter if the food items were purchased with food stamps, 104
shall be taxed at the rate of five percent (5%) from and after 105
July 1, 2025. 106
(2) From and after January 1, 1995, retail sales of private 107
carriers of passengers and light carriers of property, as defined 108
in Section 27-51-101, shall be taxed an additional two percent 109
(2%). 110
(3) A manufacturer selling at retail in this state shall be 111
required to make returns of the gross proceeds of such sales and 112
pay the tax imposed in this section. 113
SECTION 2. Section 27-65-103, Mississippi Code of 1972, is 114
amended as follows: 115
27-65-103. The exemptions from the provisions of this 116
chapter which are of an agricultural nature or which are more 117
properly classified as agricultural exemptions than any other 118
exemption classification of this chapter shall be confined to 119
those persons or property exempted by this section or by 120
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provisions of the Constitution of the United States or the State 121
of Mississippi. No agricultural exemption as now provided by any 122
other section shall be valid as against the tax herein levied. 123
Any subsequent agricultural exemption from the tax levied 124
hereunder shall be provided by amendment to this section. 125
No exemption provided in this section shall apply to taxes 126
levied by Section 27-65-15 or 27-65-21, Mississippi Code of 1972. 127
The tax levied by this chapter shall not apply to the 128
following: 129
(a) The gross proceeds of sales of lint cotton, seed 130
cotton, baled cotton, whether compressed or not, and cottonseed 131
and soybeans in their original condition. Retail sales of seeds, 132
livestock feed, poultry feed, fish feed and fertilizers. Sales of 133
defoliants, insecticides, fungicides, herbicides and baby chicks 134
used in growing agricultural products for market. Bagging and 135
ties for baling cotton, hay-baling wire and twine, boxes, bags and 136
cans used in growing or preparing agricultural products for market 137
when possession thereof will pass to the customer at the time of 138
sale of the product contained therein. Sales of ice to commercial 139
fishermen purchased for use in the preservation of seafood or to 140
producers for use in the refrigeration of vegetables for market. 141
(b) The sales by producers of livestock, poultry, fish, 142
honey bees or other products of farm, grove, apiary or garden when 143
such products are sold in the original state or condition of 144
preparation for sale before such products are subjected to any 145
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other process within a class of business or sold by a producer 146
through an established store, as defined in the Privilege Tax Law. 147
However, except as otherwise provided in this paragraph (b), this 148
exemption shall not apply to ornamental plants which bear no fruit 149
of commercial value. The exemption provided in this paragraph (b) 150
shall apply to Christmas trees, hay, straw, fresh cut flowers and 151
similar products when (i) grown in Mississippi and (ii) cut, 152
severed or otherwise removed from the farm, grove, garden or other 153
place of production and first sold from such place of production 154
in the original state or condition of preparation for sale. All 155
sales by agricultural cooperative associations organized under 156
Article 9, Chapter 7, Title 69, or under Chapter 17 or 19, Title 157
79, Mississippi Code of 1972, of agricultural products produced by 158
members for market before such products are subjected to any 159
manufacturing process. 160
(c) The gross proceeds of retail sales of mules, 161
horses, honey bees and other livestock. 162
(d) Income from grading, excavating, ditching, dredging 163
or landscaping activities performed for a farmer on a farm for 164
agricultural or soil erosion purposes. 165
(e) The gross proceeds of sales of all antibiotics, 166
hormones and hormone preparations, drugs, medicines and other 167
medications including serums and vaccines, vitamins, minerals or 168
other nutrients for use in the production and growing of fish, 169
livestock, honey bees and poultry by whomever sold. Such 170
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exemption shall be in addition to the exemption provided in this 171
section for feed for fish, livestock, honey bees and poultry. 172
(f) Sales of food products and honey that are grown, 173
made or processed in Mississippi and sold from farmers' markets 174
that have been certified by the Mississippi Department of 175
Agriculture and Commerce. 176
(g) Retail sales of farm tractors and parts and labor 177
used to maintain and/or repair such tractors, when made to farmers 178
for agricultural purposes. 179
(h) (i) Retail sales of farm implements sold to 180
farmers and used directly in the production of poultry, ratite, 181
domesticated fish as defined in Section 69-7-501, livestock, 182
livestock products, agricultural crops or ornamental plant crops 183
or used for other agricultural purposes, and parts and labor used 184
to maintain and/or repair such implements, when used on the farm. 185
(ii) The exemption in this paragraph (h) shall 186
also apply to all equipment used in logging, pulpwood operations 187
or tree farming, and parts and labor used to maintain and/or 188
repair such equipment, which is either: 189
1. Self-propelled, or 190
2. Mounted so that it is permanently attached 191
to other equipment which is self-propelled or attached to other 192
equipment drawn by a vehicle which is self-propelled. 193
In order to be eligible for the exemption provided for in 194
this subparagraph (ii), such sales must be made to a professional 195
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logger. For the purposes of this subparagraph (ii), a 196
"professional logger" is a person, corporation, limited liability 197
company or other entity, or an agent thereof, who possesses a 198
professional logger's permit issued by the department and who 199
presents the permit to the seller at the time of purchase. The 200
department shall establish an application process for a 201
professional logger's permit to be issued, which shall include a 202
requirement that the applicant submit a copy of documentation 203
verifying that the applicant is certified according to Sustainable 204
Forestry Initiative guidelines. Upon a determination that an 205
applicant is a professional logger, the department shall issue the 206
applicant a numbered professional logger's permit. 207
(i) Retail sales of posts, wire and gates to be used as 208
fencing materials for the containment of livestock, and retail 209
sales of agricultural lime, when made to commercial farmers for 210
agricultural purposes. For purposes of this paragraph (i), a 211
"commercial farmer" is a person, corporation, limited liability 212
company or other entity, or an agent thereof, that possesses a 213
commercial farmer's permit issued by the department and that 214
presents the permit to the seller at the time of purchase. The 215
department shall establish an application process for a commercial 216
farmer's permit to be issued. Upon a determination that an 217
applicant is a commercial farmer, the department shall issue the 218
applicant a numbered commercial farmer's permit. 219
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ST: Sales tax; exempt certain agricultural and
logging items.
SECTION 3. This act shall take effect and be in force from 220
and after July 1, 2026. 221