“Build Up Mississippi Act” to bring changes to taxes

By Guest Columnist
Jacob Venuti

In a historic day for the Mississippi Legislature, House Bill No. One, the “Build up Mississippi Act,” has been officially sent to Governor Tate Reeves to be signed into law, as of press time. This act will reform Mississippi’s income tax, grocery sales tax, fuel tax, and the PERS (Public Employee Retirement System). Under this law, the Mississippi income tax will decrease by 0.25% annually from 2027 until 2030, when it reaches 3%. The legislature has indicated their intent to complete a full elimination, depending on revenue growth and the condition of the State’s budget.

Effective July 1, 2025, the State’s grocery sales tax will decrease by 2%, going from 7% to 5%. As far as fuel tax adjustments go, gasoline and diesel taxes will be raised nine cents over a period of three years, when it will reach 27.4 cents per gallon; this change is to go into effect July 1, 2029. Without the fuel tax adjustment, the broader tax cut would not have been as easily secured for legislative approval, so the Mississippi House and Mississippi Senate compromised by adding the fuel tax adjustment in order to gain enough approval in both houses.
The financial impact claimed by many in the legislature for most Mississippians is that the grocery savings should offset or surpass the increase of the fuel tax. This change in the State taxation structure lays the foundation for a user-based taxation; rather than having taxation on labor, the taxation is on consumption.

For members of PERS, there will be no change in benefits or cost-of-living adjustments for any current members of PERS. Employees hired after March of 2026 will enter what is known as a Tier 5 hybrid retirement plan, which includes a reduced defined benefit with a defined contribution component, as well as additional State contributions. It is aimed for full funding by 2064, preventing a projected $20 billion deficit by 2075 under the current structure.