Mississippi lesson 5 of 6
Mississippi LLC taxes, licences and permits
Mississippi has no franchise tax on LLCs. Members of a pass-through LLC pay Mississippi's individual income tax on their share of profit, and Mississippi is in the middle of a multi-year, legislatively phased reduction of that tax.
How members are taxed
A Mississippi LLC taxed as a partnership or sole proprietorship for federal purposes passes income through to its members, who pay Mississippi individual income tax on their share. In March 2025 the governor signed House Bill 1, the Build Up Mississippi Act, which phases the individual income tax rate down over several years, with further reductions contingent on the state meeting certain revenue and reserve targets in later years. Confirm the exact current-year rate on the Department of Revenue's individual tax rates page before filing, since the schedule is phased and, in its later stages, conditional rather than fixed in advance.
An LLC that elects C corporation tax treatment instead files a Mississippi corporate income tax return; check the current corporate rate and brackets on the Department of Revenue's site, since corporate rates are set separately from the individual income tax phase-down.
Sales tax and local licensing
If you sell taxable goods or services, register with the Department of Revenue for a sales tax permit before you start selling. If you have employees, register for withholding tax through the Department of Revenue at the same time.
Mississippi has no single statewide general business licence. Many municipalities require a local privilege licence before you operate, and certain professions, for example contracting above a size threshold, cosmetology and healthcare, require a state board licence separate from the Secretary of State filing.
Check with the municipality where your LLC operates for local privilege licence requirements, since these are set locally rather than by the Secretary of State.
Key takeaways
- Mississippi has no LLC franchise tax; only pass-through members' individual income tax and any C-Corp election apply.
- The individual income tax rate is being phased down under the 2025 Build Up Mississippi Act; confirm the current rate each filing season.
- There is no statewide business licence; check your municipality and any relevant state board.
Frequently asked questions
Is Mississippi eliminating its individual income tax?
The 2025 Build Up Mississippi Act sets a multi-year phased reduction, with the deepest later cuts contingent on the state hitting revenue and reserve targets, so the pace of any move toward elimination is not fixed in advance. Check the Department of Revenue for the current year's confirmed rate.
Is there a statewide business licence in Mississippi?
No. Licensing depends on your municipality and on any state board that regulates your specific profession or industry.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team