Income tax; suspend reductions until PERS is funded at 80%.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Blount

SENATE BILL NO. 3031

AN ACT TO AMEND SECTION 27-7-5, MISSISSIPPI CODE OF 1972, TO 1
SUSPEND THE REDUCTION OF THE TAX ON ALL TAXABLE INCOME OF 2
INDIVIDUALS IN EXCESS OF $10,000.00 UNTIL AN INDEPENDENT ACTUARY 3
HIRED BY THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF MISSISSIPPI 4
ISSUES A WRITTEN DETERMINATION THAT THE UNFUNDED ACTUARIAL ACCRUED 5
LIABILITY OF THE SYSTEM IS LESS THAN 20%; TO STATE THE INTENT OF 6
THE LEGISLATURE TO CONSIDER, BEFORE THE INCOME TAX RATE DECREASES 7
TO 3%, WHETHER THE RATE WILL BE FURTHER DECREASED BELOW 3%; TO 8
REPEAL SECTION 27-7-5.1, MISSISSIPPI CODE OF 1972, WHICH PROVIDES 9
FOR THE FURTHER REDUCTION OF THE TAX ON ALL TAXABLE INCOME OF 10
INDIVIDUALS IN EXCESS OF $10,000.00 UNDER CERTAIN FISCAL 11
CONDITIONS; AND FOR RELATED PURPOSES. 12
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 13
SECTION 1. Section 27-7-5, Mississippi Code of 1972, is 14
amended as follows: 15
27-7-5. (1) (a) Except as otherwise provided in this 16
section, there is hereby assessed and levied, to be collected and 17
paid as hereinafter provided, for the calendar year 1983 and 18
fiscal years ending during the calendar year 1983 and all taxable 19
years thereafter, upon the entire net income of every resident 20
individual, corporation, association, trust or estate, in excess 21
of the credits provided, a tax at the following rates: 22
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(i) 1. Through calendar year 2017, on the first 23
Five Thousand Dollars ($5,000.00) of taxable income, or any part 24
thereof, the rate shall be three percent (3%); 25
2. For calendar year 2018, on the first One 26
Thousand Dollars ($1,000.00) of taxable income there shall be no 27
tax levied, and on the next Four Thousand Dollars ($4,000.00) of 28
taxable income, or any part thereof, the rate shall be three 29
percent (3%); 30
3. For calendar year 2019, on the first Two 31
Thousand Dollars ($2,000.00) of taxable income there shall be no 32
tax levied, and on the next Three Thousand Dollars ($3,000.00) of 33
taxable income, or any part thereof, the rate shall be three 34
percent (3%); 35
4. For calendar year 2020, on the first Three 36
Thousand Dollars ($3,000.00) of taxable income there shall be no 37
tax levied, and on the next Two Thousand Dollars ($2,000.00) of 38
taxable income, or any part thereof, the rate shall be three 39
percent (3%); 40
5. For calendar year 2021, on the first Four 41
Thousand Dollars ($4,000.00) of taxable income there shall be no 42
tax levied, and on the next One Thousand Dollars ($1,000.00) of 43
taxable income, or any part thereof, the rate shall be three 44
percent (3%); 45
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6. For calendar year 2022 and all taxable 46
years thereafter, there shall be no tax levied on the first Five 47
Thousand Dollars ($5,000.00) of taxable income; 48
(ii) On taxable income in excess of Five Thousand 49
Dollars ($5,000.00) up to and including Ten Thousand Dollars 50
($10,000.00), or any part thereof, the rate shall be four percent 51
(4%); and 52
(iii) On all taxable income in excess of Ten Thousand 53
Dollars ($10,000.00), the rate shall be five percent (5%). 54
(b) (i) For calendar year 2023 and all calendar years 55
thereafter, there shall be no tax levied under subparagraph (ii) 56
of paragraph (a) of this subsection on the taxable income of 57
individuals in excess of Five Thousand Dollars ($5,000.00) up to 58
and including Ten Thousand Dollars ($10,000.00), or any part 59
thereof; and 60
(ii) For calendar year 2024 and all calendar years 61
thereafter, the tax imposed under subparagraph (iii) of paragraph 62
(a) of this subsection upon all taxable income of individuals in 63
excess of Ten Thousand Dollars ($10,000.00), shall be at the 64
following rates: 65
1. For calendar year 2024, on such taxable 66
income, the rate shall be four and seven-tenths percent (4.7%); 67
2. For calendar year 2025, on such taxable 68
income, the rate shall be four and four-tenths percent (4.4%); 69
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3. For calendar year 2026 and all calendar 70
years thereafter, except as provided in items 4 through 7 of this 71
subparagraph (ii), on such taxable income, the rate shall be four 72
percent (4%); 73
4. For the first calendar year * * * after 74
the effective date of this act, on such taxable income, the rate 75
shall be three and three-quarters percent (3.75%); 76
5. For the second calendar year * * * after 77
the effective date of this act, on such taxable income, the rate 78
shall be three and one-half percent (3.5%); 79
6. For the third calendar year * * * after 80
the effective date of this act, on such taxable income, the rate 81
shall be three and one-quarter percent (3.25%); and 82
7. For the fourth calendar year * * * after 83
the effective date of this act and all calendar years 84
thereafter, * * * on such taxable income, the rate shall be three 85
percent (3%). 86
It is the intent of the Legislature that before the rate in 87
item 7 of this subparagraph (ii) goes into effect, the Legislature 88
will consider whether the revised tax rates provided for in this 89
subparagraph (ii) will be further decreased. If the revised tax 90
rates provided for in this subparagraph (ii) are further decreased 91
to the extent that there is no tax levied on the taxable income of 92
individuals under this subparagraph (ii), the individual income 93
tax shall stand repealed. 94
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(2) An S corporation, as defined in Section 27-8-3(1)(g), 95
shall not be subject to the income tax imposed under this section. 96
(3) A like tax is hereby imposed to be assessed, collected 97
and paid annually, except as hereinafter provided, at the rate 98
specified in this section and as hereinafter provided, upon and 99
with respect to the entire net income, from all property owned or 100
sold, and from every business, trade or occupation carried on in 101
this state by individuals, corporations, partnerships, trusts or 102
estates, not residents of the State of Mississippi. 103
(4) In the case of taxpayers having a fiscal year beginning 104
in a calendar year with a rate in effect that is different than 105
the rate in effect for the next calendar year and ending in the 106
next calendar year, the tax due for that taxable year shall be 107
determined by: 108
(a) Computing for the full fiscal year the amount of 109
tax that would be due under the rates in effect for the calendar 110
year in which the fiscal year begins; and 111
(b) Computing for the full fiscal year the amount of 112
tax that would be due under the rates in effect for the calendar 113
year in which the fiscal year ends; and 114
(c) Applying to the tax computed under paragraph (a) 115
the ratio which the number of months falling within the earlier 116
calendar year bears to the total number of months in the fiscal 117
year; and 118
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ST: Income tax; suspend reductions until PERS
is funded at 80%.
(d) Applying to the tax computed under paragraph (b) 119
the ratio which the number of months falling within the later 120
calendar year bears to the total number of months within the 121
fiscal year; and 122
(e) Adding to the tax determined under paragraph (c) 123
the tax determined under paragraph (d) the sum of which shall be 124
the amount of tax due for the fiscal year. 125
SECTION 2. Section 27-7-5.1, Mississippi Code of 1972, which 126
provides for the reduction of the tax on all taxable income of 127
individuals in excess of Ten Thousand Dollars ($10,000.00) under 128
certain fiscal conditions, is repealed. 129
SECTION 3. This act shall take effect and be in force from 130
and after the first July 1 following a written determination by an 131
independent actuary hired by the Public Employees' Retirement 132
System of Mississippi that the unfunded actuarial accrued 133
liability of the system is less than twenty percent (20%). 134