Legislation to eliminate the state income tax and lower taxes on groceries has come alive in the Mississippi House.
Authored by Speaker Phillip Gunn, House Bill 1439 known as the Mississippi Tax Freedom Act of 2021 passed out of the House Ways and Means Committee on Monday.
The bill would phase out the state income tax for all residents over a 10 year period. All Individuals earning less than $50,000 a year and all married couples making under $100,000 a year would see their income tax eliminated in 2022. Taxes on groceries would also get cut from 7 percent to 4 percent beginning this summer and reduced to 3.5 percent by 2027.
Republican Reps. Nick Bain of Corinth and Bubba Carpenter of Burnsville, who both serve on the Ways and Means Committee, voted to pass the bill.
“This is good government policy and is a transformative piece of legislation,” said Bain, who shared information about the bill with the Daily Corinthian following the late afternoon meeting. “When fully phased in, this act would put $1.9 billion of income and grocery tax back into the pockets of Mississippi tax payers.”
To offset the tax cuts, sales tax in the state would increase from 7 percent to 9.5 percent.
Bain said such an increase is ideal and much fairer for all Mississippians.
“Currently not everyone pays income tax, but everyone pays sales tax. With the policy, the state’s pool of taxpayers will increase as people from other states pay sales tax when they shop and eat in our cities,” the lawmaker added. “Most importantly this would put more money in the pockets of Mississippians and give them more control over the amount of tax they pay.”
Before becoming law, the bill must be passed by the full House. Bain expects that to happen fast saying it could come this week. After the House approves the bill, it would move to the Senate for more debate before being sent to Republican Gov. Tate Reeves to sign into law.
In his State of the State address last month, Reeves asked lawmakers to work on legislation to eliminate the sales tax.