Here’s why this week’s groceries may be cheaper
.png "A new law that will reduce what you pay for groceries goes into effect Tuesday, July 1.")
Starting next week, your groceries will be a few cents cheaper as the state lowers taxes on groceries from 7% to 5%.
The grocery tax reduction is part of House Bill 1, tax plan introduced as the Build Up Mississippi Act.
State legislators plan to make up for the loss in grocery taxes by distributing more of Mississippi’s use taxes to local governments, according to Stephen Clay, a legislative representative for the Mississippi Society of CPA’s.
Mississippi places a 7% use tax on anything bought outside of the state for use within its borders. Online purchases would be one example of items subject to the use tax.
Are higher gas prices in Mississippi’s future?
While grocery taxes reduce, gas taxes will increase over the next three years.
The excise tax on gasoline will begin a 9-cent phase-in increase by 3 cents per gallon, per year in 2025, 2026 and 2027.
Starting July 1, 2029, the excise tax on gasoline will increase every other year.
“HB 1 marks the third bill passed by the legislature in the last ten years in an ongoing effort to phase out the state personal income tax,” said Clay.
How will income tax rates change?
“Under current law, the income tax rate for those making over $10,000 (≤ is exempt) will be down to 4% by calendar-year 2026,” said Clay.
The tax rate will continue to reduce every year at the following rates:
- In 2027, 3.75%
- In 2028, 3.5%
- In 2029, 3.25%
- In 2030, 3%
With a goal of reaching a 0% income tax rate, the trend may continue after 2030, provided the state remains fiscally stable.
