The Mississippi Senate has passed Senate Bill 3095, a comprehensive tax relief bill to reduce the individual income tax and lower the grocery tax.
According to Lt. Governor Delbert Hosemann, the bill would increase infrastructure funding while not raising sales tax. The bill would reach full implementation in 2030 and includes:
• Lower Grocery Tax: A reduction in the grocery tax from 7% to 5% effective July 1, 2025, saving taxpayers an estimated $127.5 million annually.
• Income Tax Reduction: A continued gradual elimination of the individual income tax from 4% to 2.99% by 2030, at an estimated cost of $411 million, making Mississippi the third lowest of the 41 states that impose an income tax.
• Infrastructure Investment: An additional $212 million in infrastructure funding through three-year phased increase of 3 cents per gallon per year, resulting in a total 9-cent increase in the state gas tax, which would keep Mississippi below the Southeastern gas tax average.
“Mississippi families, workers, and retirees need immediate tax relief, and we are one step closer to making that a reality. With the Senate’s advancement of Senate Bill 3095, we are moving forward with the next phase of historic reform,” said Hosemann. “Our priorities are clear—lowering grocery costs, rewarding hard work instead of taxing it, and ensuring strong, consistent infrastructure funding. This plan is consistent, conservative, and financially responsible, ensuring we provide relief while maintaining a stable economic foundation for the future.”
If implemented, Hosemann said the Senate’s plan would eliminate an estimated $538 million in tax revenue from the state’s general fund.
The bill moves to the Mississippi House of Representatives for consideration.
