The Mississippi House is set to vote on a major tax cut plan that could impact personal income and grocery taxes across the state.
House Ways and Means Chairman Trey Lamar, who’s behind the bill, mentioned he’ll bring House Bill 1 to his committee for a vote soon. If it passes there, it’ll head to the Senate, where they have a different approach in mind.
Since this is a revenue bill, lawmakers have until February 26 to send it to the Senate. The tax cuts would roll out over ten years.
Lamar expressed optimism, saying they’ve been working on this for years and are ready to present it. The plan focuses on eliminating the state income tax, creating a fuel tax for infrastructure, and reducing grocery sales tax.
He believes this approach will appeal to those cautious about tax cuts while still being reasonable in terms of timing. House Speaker Jason White and Governor Tate Reeves are both on board, along with several statewide officials.
White emphasized that House Bill 1 is a top priority, aiming to enhance Mississippi’s competitive edge by eliminating the income tax and cutting grocery taxes. The overall goal is to cut $2.2 billion in taxes while adding $1.1 billion to support local funding.
The specifics of House Bill 1 include eliminating $2.2 billion in income tax over ten years, reducing grocery sales tax from 7% to 2.5%, and introducing a local-option sales tax. There’s also a proposed 5% fuel sales tax to help fund road and bridge projects.
Lamar believes this legislation is transformative for Mississippi, providing more funds for cities and counties while supporting future business and commerce.
However, the Senate has a different plan in the works, which could lead to some debates. Senate Finance Committee Chair Josh Harkins hasn’t commented yet, but legislative deadlines are approaching.
Lt. Gov. Delbert Hosemann recently shared his tax reform ideas, which include reducing personal income tax to 3% and grocery sales tax to 5%. He also mentioned safeguards to pause tax cuts if state revenue drops.
It’ll be interesting to see how this all unfolds in the coming weeks!
