Mississippi House passes Build Up Mississippi Act, advancing 10-year income tax phase-out and sales-tax changes

The Mississippi House on the floor approved House Bill 1, the Build Up Mississippi Act, advancing a plan to phase out the state income tax over 10 years while reducing the grocery sales tax and changing how several existing revenue streams are diverted. The bill passed on a final vote of 88-24.

The bill’s sponsor, the Ways and Means chairman identified in debate as the representative from Tate, told members: “we are going to eliminate the tax on work for you, your children, your grandchildren, and all future generations.” He described the plan as a package intended to (1) make Mississippi’s tax code more competitive, (2) provide additional recurring support to cities and counties, and (3) provide roughly $400 million a year to the Department of Transportation for highways. The sponsor said the plan would be phased in over ten years and called it “the largest tax cut in the history of the state.”

Why it matters: The measure would change the state’s primary revenue mix by removing the individual income tax over a decade, cutting the state portion of the grocery sales tax, adding a 1.5 percentage-point local option sales tax for participating cities and counties, shifting some lottery proceeds to the Public Employees’ Retirement System (PERS) and setting up a budget stabilization fund to smooth timing differences.

Key provisions and figures discussed on…