Mississippi has officially joined the ranks of states with no personal income tax. On March 27, 2025, Mississippi Gov. Tate Reeves (R) signed House Bill 1, also known as the “Build Up Mississippi Act,” into law.
This legislation eliminates the state’s individual income tax through a phased approach, with full implementation expected over the next several years.
Governor Reeves expressed pride in this achievement, declaring, “Mississippi will no longer tax the work, the earnings, or the ambition of its people.”
He emphasized the significance of the legislation, noting that only a handful of states do not tax income, positioning Mississippi among this elite group.
The new law gradually reduces Mississippi’s current income tax rate of 4.4% to 3% by 2030. Starting in 2026, the state will implement annual 0.25% reductions.
If state revenue growth meets specific benchmarks, these reductions will continue each year until the rate reaches zero.
The elimination of the state income tax has long been a central goal for Governor Reeves, who made this promise a key part of his platform. He highlighted his years of effort, from his tenure as lieutenant governor to his gubernatorial campaigns, to bring about this transformation, per Trending Politics.
Reeves believes that a lower tax burden will make Mississippi a more attractive place for families, workers, and investors.
He further stressed his commitment to reducing government involvement in people’s finances, stating, “Government should take less so that you can keep more.” The governor sees this change as a victory for working families and an opportunity for Mississippi to become a magnet for talent and investment.
While the tax cuts will benefit workers, they come with some trade-offs. To offset the revenue losses from the elimination of income taxes, the state has decided to raise the gasoline tax. Starting in July 2025, the gas tax will increase by three cents per gallon each year for three years, reaching 27 cents per gallon by 2027.
In addition to the gas tax increase, the bill also includes a reduction in the grocery sales tax. The grocery sales tax will decrease from 7% to 5%, providing some relief to Mississippi families at the checkout.
Governor Reeves believes that the law reflects the will of the people, representing a shift toward long-term economic growth. He credited legislative leaders, including Speaker Jason White and Lt. Gov. Delbert Hosemann, for their support in passing the bill.
This move positions Mississippi alongside states like Texas, Florida, and Tennessee, which have also eliminated state income taxes in an effort to attract new businesses and residents.
As of 2025, ten states do not impose an income tax, offering benefits such as lower living costs and potential savings for residents.
The states in this group include Alaska, Florida, Nevada, South Dakota, Texas, Tennessee, Washington, Wyoming, and New Hampshire. While New Hampshire does not tax wages, it does tax interest and dividends. These states often compensate for the loss of income tax revenue through higher sales, property, or tourism taxes.
