MS HB734

Reduces the sales tax rate on retail food for human consumption (not purchased with food stamps but eligible for exemption if purchased with food stamps) from 7% to 3.5%, effective July 1, 2025.

Modifies sales tax revenue distribution to exclude the new food tax from certain existing allocations to municipalities, state institutions of higher learning, and the Capitol Complex Improvement District.

Allocates 37% of revenue from the new 3.5% food tax to municipalities, 37% to state institutions of higher learning (on campus sales), and 18% to the City of Jackson's Capitol Complex Improvement District.

Directs 4.53% of food tax revenue to the School Ad Valorem Tax Reduction Fund and 18.146% to the Education Enhancement Fund after the existing cap of $42 million is reached.

Applies the changes beginning September 15, 2025, for all new distribution mechanisms related to the reduced food tax rate.