Senate Bill 2875 Summary

• Phases out Mississippi's state income tax based on General Fund revenue growth, with the tax rate on wages and personal income over $10,000 decreasing by 0.5% each year when revenue exceeds the previous year by either 1.5% or the inflation factor (whichever is lesser).

• Establishes a $10,000 standard deduction for individual income tax filers starting in 2022, with a flat 5% tax rate on income exceeding that threshold.

• Requires the Commissioner of Revenue to certify annually by October 1 whether General Fund revenue conditions warrant a tax rate reduction, with reductions effective the following January 1.

• Completely repeals the individual income tax once the tax rate reaches zero percent, effective January 1 of the year following Commissioner certification of qualifying revenue growth.

• Takes effect July 1, 2023.