Mississippi’s Pro-Business Tax Climate Strengthens Your Bottom Line
Competitive Snapshot and Mythbusters
Low Tax Burden for Strong Bottom Line
Mississippi delivers a significant tax advantage nationally and across the Southeast. With a combined state and local tax burden of $4,868 per capita, which is the lowest in the nation and 31% below the national average, the state’s tax structure reduces costs for employers and stretches compensation for employees. Mississippi also leads the Southeast in the two tax categories that carry the greatest weight in site selection cost models: corporate taxes (No. 6 nationally at 4%) and unemployment insurance taxes (No. 13 nationally at 5.4%).
While the Tax Foundation ranks Mississippi No. 27 overall, the state is positioned to become even more competitive as the income tax phases down under the Build Up Mississippi Act (HB 1). The legislation moves Mississippi closer to the no-income-tax advantage enjoyed by Florida, Texas and Tennessee.
Disclaimer: Mississippi House Bill 1 (HB1) institutes guaranteed income tax reductions from 2026 to 2030, followed by a contingent phase-down to 0% starting in 2031 that relies on state fiscal conditions.
Mythbusters
MYTH #1
Mississippi is a poor state, which signals economic and fiscal risk.
REALITY
Mississippi is an accelerating economy with a low cost base and improving fiscal credibilityꟷthe opposite of risk.
Mississippi also has the lowest state and local tax burden in the nation at $4,868 per resident, allowing families to keep more of what they earn while helping employers control operating costs.
In March 2026, S&P Global revised Mississippi’s credit outlook from negative to stable, citing the state’s commitment to balanced budgets and healthy reserves.
Median household income in Mississippi continues to rise, increasing 25% in nominal terms and 3.1% in real terms over the past five years. The state’s Regional Price Parity Index, or affordability index, is 87.3, meaning a household earning $67,000 in Mississippi enjoys purchasing power equivalent to approximately $77,000 in the average U.S. market—a 15% advantage. Read more about Mississippi’s median household income upward trend.
MYTH #2
Mississippi workers are less productive or less skilled since the state ranks at the bottom for average weekly earnings at $1,029. (Source: BLS, June 2026).
REALITY
Mississippi’s wages reflect the state’s competitive labor costs, not workforce quality.
Productivity is a more relevant measure of workforce capability than wage levels, and Mississippi’s productivity is rising. In fact, overall productivity has increased by 12% over the past 15 years, with private nonfarm labor productivity increasing by nearly the same amount, giving employers a competitive advantage without sacrificing performance (BLS, Index 2017=100).
Mississippi’s workforce is also becoming more specialized in STEM occupations. The state has above-average concentrations of workers in several technical fields that are growing rapidly, including computer network support specialists, physical scientists, environmental science technicians, mechanical engineering technologists and agricultural technicians.
High concentrations of workers in technical occupations—combined with strong growth in those fields—signal a workforce that is developing specialized skills.
MYTH #3
Mississippi’s No. 27 ranking means it isn’t truly competitive on taxes.
REALITY
Mississippi holds a competitive advantage in two of the business-sensitive components of the index and is on track to eliminate its personal income tax.
The Tax Foundation’s overall ranking combines five major tax components, with individual income tax accounting for nearly one-third of the total score. However, the tax categories that directly affect capital-intensive project economics—such as corporate taxes and unemployment insurance taxes—are areas where Mississippi ranks among the top 15 states nationally. According to the Tax Foundation’s methodology, ‘businesses that are comparing states for new or expanded locations must give greater emphasis to tax climates when the differences are large,’ and Mississippi holds a competitive advantage in two of the business-sensitive components of the index.
The overall ranking also reflects current tax policy and does not fully capture Mississippi’s trajectory. Under HB 1, the state’s personal tax rate is already declining and is on a legislated path to reach 0%. Because individual income tax carries the greatest weight in the index, Mississippi’s ranking is expected to improve as those reductions take effect.
When fully implemented, Mississippi will join Florida, Tennessee and Texas among the states with no personal income tax. Mississippi’s tax structure is already competitive before a single incentive is negotiated, and whether a company qualifies for Mississippi’s Flexible Tax Incentive (MFLEX), a targeted industry program, or local property tax relief, those incentive programs strengthen a cost position that is already among the most competitive in the Southeast.