Mississippi Aims to Abolish Income Tax — and Replace it With Gas Tax

Mississippi House and Senate leaders are proposing to eliminate income tax, which currently accounts for nearly a third of the state budget. In its place they are proposing to add an additional fuel tax on top of the 18.4 cents per gallon of gas that Mississippi motorists currently pay, reports Mississippi Today. The increase in gas tax would complement other small changes such as a slight increase to sales tax and growth from undefined “economic triggers.”

The House and the Senate differ on the specifics of their proposals. The House proposes a one percent increase in sales tax that would go primarily toward infrastructure improvements via the State Aid Road Fund. They propose the gas tax should increase by 5 cents per year for three years for a total increase of 15 percent.

The Senate’s plan proposes to increase the gas tax by only 9 cents over three years. According to the Clarion Ledger, which offers a detailed rundown of recent changes to the House proposal and a comparison of the House and Senate Plans, the gas tax would fund MDOT and the Strategic Multi-Modal Investments Fund.

Both plans propose to eliminate Mississippi’s 4 percent income tax — among the lowest in the nation — entirely.