Mississippi Sales Tax Guide

Mississippi, the twentieth state in the union, is the birthplace of many classic American inventions. Blues, arguably one of America’s most important cultural contributions, originally hail from the Mississippi Delta. Additionally, we wouldn’t be able to enjoy a rootbeer float on a hot summer day without Alfred Barq’s clutch 1898 invention out of Biloxi. With more churches per capita than any other state, Mississippi is also a proudly religious state. If you’re one of the small business owners happily calling Mississippi home, you’ll want to stay in line with the Mississippi Department of Revenue's sales and use tax laws. No problemo! We have assembled this all-in-one guide for sales tax so that you can meet all the sales tax requirements for a small business in Mississippi. 

After reading this guide, you will have learned:

• How to be prepared for your call with the Mississippi Department of Revenue.
• How to contact the Mississippi Department of Revenue.
• When to charge sales tax in Mississippi.
• What goods, products, and services are taxable in Mississippi.
• When you establish a sales tax nexus with the state of Mississippi, and the nuances of various thresholds.
• How to register for a sales tax license in Mississippi.
• How to collect sales tax in Mississippi.
• How to file and pay sales tax in Mississippi.

If, after reading, you still have any questions to help you determine your tax sales obligations in Mississippi and how to fulfill them, we are here for your small business bookkeeping needs! 

Mississippi Sales Tax Contacts

✅  Do you need to get in touch with the Mississippi Department of Revenue?

✅  Are you uncertain about whether to visit, call them, or contact them through their website?  

✅ Do you wonder what information you should have ready before you contact them?

If you answered “Yes” to any of these questions, please read onward, as we have just the information you need! :)

The Mississippi Department of Revenue is reachable by phone at 601-923-7700. 

You can also contact them by visiting a district office or sending a message via their website. 

When you do call the Mississippi Department of Revenue, you will want to have some information on hand. It will save time to have the following information easily accessible before you call: 

• Taxpayer Name
• EIN
• Sales & Use Tax ID Number

If you are calling on behalf of an individual or a business, or having a third party call on your behalf, you must have a Mississippi Power of Attorney form (PDF) signed before you call or else you will waste your time; they will only help if you have a completed form. 

Should you have more questions, please feel free to contact us so we can assist you with your sales tax needs.

Mississippi Sales Tax Registration

Are you a new business selling tangible property in Mississippi? If yes, you are going to want to register your business with the Mississippi Department of Revenue so that you can pay your sales tax in full and on time. 

You need not fret, as this is a fairly simple process and one for which we’re about to fully prepare you. We are going to outline the steps below so you are totally ready to register for your sales tax license.

Here we go! Remember...

Preparation is key. 

Let’s get started!

How do I register to collect sales tax in Mississippi?

You can most quickly register your Mississippi state sales tax permit by visiting the Mississippi Taxpayer Access Point site and following the instructions provided.

If, for some reason, you prefer a paper version, Mississippi is unable to accommodate you. They require all registrants to utilize the TAP site, which we love!

What information do I need to register for a Mississippi sales tax permit?

Great question!

Before you sign up for Mississippi sales tax permit you’ll want the following information on hand:

• Business name
• Business entity type 
• Description of business activities
• Date business activities began or will begin
• Business address and mailing address
• Business contact information
• Associated business entities 
• NAICS code that best matches the business
• Federal Employer Identification Number (FEIN)

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the Mississippi Taxpayer Access Point site website. 

How much does it cost to register for a Mississippi sales tax permit?

The cost to register a new sales tax permit in Mississippi is $0. We are always stoked when we get to provide this answer! :) 

Do I need a Federal Tax ID Number or EIN to register for a Mississippi sales tax permit?

Yes! You will certainly need one, but if you don’t already have one and need to get a new EIN, it’s a straightforward process. You can register for a Federal EIN right here :). 

Which agencies in Mississippi do I need to additionally register with?

You may additionally need to contact some of the following agencies: 

• Mississippi Worker's Compensation Commission
• Mississippi Office of the Treasurer
• Mississippi Department of Banking and Consumer Finance

You’ll want to think this through and do some research and investigating; every business is unique and, because of that, different rules, regulations, and laws may apply. 

We suggest contacting the Mississippi Department of Revenue to verify which additional government agencies you may be required to register with. 

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Huzzah!

You are now prepared to register for your Mississippi sales tax permit in Mississippi. 

Let’s summarize what we have covered so far:  

• Have all the required information easily accessible before registering online.
• Acquire a tax ID or EIN before registering for a Mississippi sales tax permit.
• Register online at the Mississippi Taxpayer Access Point site site.
• Look into what other agencies you may have to additionally register with.

Registering for your Mississippi sales tax permit will be stress free as long as you are adequately prepared. We always recommend organizing all the essential information in a folder, preferably mirroring paper files with a system like Box.com or Dropbox (something we’re happy to handle for our customers). 

Mississippi Sales Tax FAQ 

By now, you may have already contacted the Mississippi Department of Revenue and applied for a Mississippi sales tax permit. 

Once you have a license to collect and remit sales taxes in Mississippi, you will probably be asking yourself two questions: 

• When do I charge a sales tax in Mississippi?

• What goods and services are subject to sales taxes in Mississippi? 

We are going to go over the most common sales tax questions our clients ask. We believe the answers to these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations. 

Let’s start with the first question…

What goods and services are considered taxable in Mississippi?

Unless exempted specifically, all sales of tangible personal property are considered taxable in the state of Mississippi. Most services are exempt, but some services are taxable.

The bottom line is …

Your business must pay taxes on sales of any non-exempt goods and services.

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Let’s now review some of our clients’ frequently asked questions:

• Is Mississippi an Origin or Destination sales tax State?

• What creates a sales tax nexus in Mississippi?

• What is the economic threshold in Mississippi?

• Does Amazon have fulfillment centers in Mississippi?

• Does Mississippi have a Click-Through Nexus?

To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions (such as affiliate marketers). 

 Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.   

Is Mississippi an origin or destination-based sales tax state?

Mississippi is an origin-based sales tax state. This means you charge sales tax based on the location of the business rather than that of the purchaser. This should be relatively straightforward to configure in any Point-of-Sales system.

 Protip: Charge the customer tax based on your location, not theirs.

What creates a tax nexus with the State of Mississippi?  

Having nexus, also known as "sufficient business presence,” with Mississippi means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Mississippi because you created Sales Tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Mississippi Department of Revenue even if you never step foot in Mississippi.   

So, how do you create a Sales Tax Nexus in Mississippi?

A business establishes a nexus in Mississippi by:

• having a business location in Mississippi;
• having property stored in Mississippi;
• employing any person in Mississippi;
• contracting with a salesperson or other agent in Mississippi;
• leasing equipment used in Mississippi;
• performing services in Mississippi;
• licensing the use of intangible property in Mississippi, or transporting property in Mississippi using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse. 

Does Amazon have fulfillment centers in Mississippi?

Nope, no fulfillment centers at this time.

Does Mississippi have economic nexus?

Yes! This means that even if your business isn’t located in the state or doesn’t in any traditional way create nexus, you may still have to register and pay sales tax in Mississippi.

The threshold for creating economic nexus with Mississippi differs from the original Wayfair decision: sales over $250,000/year to Mississippi purchasers triggers nexus, irrespective of the number of transactions. 

For more information keep an eye on Mississippi DOR’s online sellers guidance (PDF).

Does Mississippi have click-through nexus?

Not at this time. Affiliate marketers and those who employ them don’t have to worry about this extra tax complication. 

Is Mississippi a streamlined sales tax state?

Not at this time, but here’s hoping they may one day join this time saving program.

More effectively manage your tax needs by keeping this guide handy. 

You and your business can be better equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Mississippi.

Collecting Sales Tax in Mississippi

By now you know if you are a business that has established a nexus with Mississippi. So you have an understanding about whether, or when, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Mississippi Sales Tax obligations. 

• How do I collect Mississippi Sales Tax?
• Who is eligible for Mississippi Sales Tax exemptions?
• What should I do if my customer is exempt from sales tax in Mississippi?
• What happens if I lose a Mississippi nontaxable transaction certificate? 

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Mississippi.

How do I collect Mississippi sales tax?

Because Mississippi is an origin-based sales tax state, your business should charge sales tax at the time of the transaction based on the business location rather than that of the purchaser. This is usually as simple as configuring the Point-of-Sales system accordingly. In Mississippi, cities may add additional tax, so be sure to check if your city does! :]

What are the current Mississippi sales tax rates?   

At the time of this article’s publication, Mississippi’s sales tax rate is 7%. Since sales tax rates may change, we suggest utilizing this link to stay up to date.

It always helps to be accurate and up to date with this type of information! :) 

What is exempt from Mississippi sales tax?

Here is a sample list of exemptions: 

• purchases for resale
• Medical supplies
• Groceries, unprepared food 
• Agricultural supplies
• Manufacturing machines, supplies

Mississippi’s Department of Treasury exemptions page goes into more detail. Beyond that, everything is included in taxable goods. 

Who are eligible for Mississippi sales tax exemptions?

At this point, you should know what products are exempt from sales tax in Mississippi. You also want to know who may be exempt. 

Under Mississippi law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

• Government agencies
• Certain Non-profit organizations [e.g. American Red Cross, Salvation Army, and Boy Scouts & Girl Scouts of America]
• Out-of-state buyers (should their business not have nexus in their home state).

For more information, check out Mississippi Department of Revenue’s exemptions page.

What should I do if my customer is exempt from sales tax in Mississippi?

Purchasers who are tax exempt must have a letter from the Mississippi DOR and must present their letter at the time of purchase. It is then up to the seller to hang on to a copy of this proof of tax exemption. Failure to do so may leave you unable to justify tax exempt sales.

What happens if I lose a Mississippi sales tax exemption certificate?

Ideally this situation is to be avoided entirely! Finding out you’ll be audited and then discovering you cannot produce a required exemption certificate is a bad day. That scenario would mean you could be held liable to pay all taxes on behalf of the buyer. This whole ordeal could be easily avoided by taking proper care with your paperwork… which happens to be one of our specialties! :) 

Does Mississippi have a sales tax holiday?

Yes! In Mississippi has a tax holiday for back to school that occurs on the last Friday and Saturday of July. During the holiday clothing items that are $100 or less are tax free. 

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We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Mississippi state. 

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper! 

Filing and Paying Sales Tax in Mississippi

It is time to talk about filing and paying your sales taxes in Mississippi. In this section, We are going to cover the following frequently asked questions from our clients:

• When is Mississippi Sales Tax due?
• What are the Mississippi Sales Tax thresholds?
• What if a Mississippi Sales Tax filing date falls on a weekend or holiday?
• How do I file a Mississippi Sales Tax Return?
• How do I correct a Mississippi Sales Tax return?
• What happens if I don’t collect sales tax?
• What happens if I file or pay my sales tax return late?
• Do I need to file a return if I don’t collect any sales tax in Mississippi?
• If I close my business, do I need to file a final sales tax return?
• Does the Mississippi Department of Revenue offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Mississippi Sales Tax.

When is Mississippi sales tax due?

Mississippi sales tax payments are due no later than the 20th day following the reporting interval. 

What are the Mississippi sales tax filing interval thresholds?

The thresholds for filing intervals are:

*based on actual sales for existing companies or projected for new ones

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point-of-Sale Software to see the volume of sales you have generated. 

Don't worry though! The state will let you know when your due dates change. :) 

Keep an eye out for notices in your mail from the State of Mississippi so that you don't miss any shift in deadlines.

What if a Mississippi sales tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday, of course ;). 

How do I file a Mississippi sales tax return?

Paper: Verboten! Mississippi is an e-file only state and we love them for it :). 

Electronic: File online via the Mississippi Taxpayer Access Point site website and submit payment via EFT.

Mississippi offers a Video Guide on the filing process you may find handy if you get lost [it’s simple enough that you likely won’t need it]  

How do I correct a Mississippi sales tax return?

Paper: Unpossible! They don’t permit paper filings, let alone amendments.

Electronic: Correct the submitted return via the Mississippi Taxpayer Access Point site website and submit payment via EFT

What happens if I fail to collect sales tax?

Mississippi requires businesses with nexus to collect and remit sales tax on all applicable purchases. If you were required to collect sales tax and failed to do so for whatever reason, that’s a big time no-no! The business will be held liable for the due tax.

Always make sure to collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful. 

Protip: You are still be responsible for remitting sales taxes even if you failed to collect them. 

What happens if I file or pay my sales tax return late?

The Mississippi Department of Revenue charges 10% penalty applied, or interest of .5%, or both, for late filing or failure to pay. We strongly suggest you file and pay on time! :) 

Do I need to file a return if I don’t collect any sales tax in Mississippi?

Yes, Mississippi requires businesses file a “Zero-Tax” return even when they have no sales during a taxing period. 

If I close my business, do I need to file a final sales tax return?

Yes, Mississippi requires businesses to file a final return when closing your doors.

Does the Mississippi Department of Revenue offer a discount for filing on time?

Yes, a 2% discount is granted up to a maximum of $50 per filing period. May not seem like much but if you’re filing monthly you could save $600/year on your tax liability for being early! We always suggest capitalizing on tax discounts where possible.

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Now that we have covered all the bases for filing and paying sales taxes in the state of Mississippi, you should feel more at ease about the process.

Some things to remember:

• Due dates are important. If anything, file and pay your taxes early.
• There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
• You can file and pay your taxes electronically or by mail
• If you need to amend a return, you may do so electronically or by paper.
• If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Mississippi.
• You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
• Even if you collect no sales tax, you still need to file a return.
• You need to file a “Final return” when you close your business.

Now you are ready to file and pay your sales tax in Mississippi! If you have any more questions, feel free to contact us.

Please note: This blog is for informational purposes only and the information is accurate as of 8/5/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.