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

The new gas tax would fund MDOT and the Strategic Multi-Modal Investments Fund.

1 minute read

March 19, 2025, 8:00 AM PDT

By Christine McLaren


Mississippi state capitol dome at night with purple flowers in foreground in Jackson, Mississippi.

State capitol in Jackson, Mississippi. | Matt Gush / Adobe Stock

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. 

Monday, March 17, 2025 in Mississippi Today

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

June 11, 2025 - Diana Ionescu

Metrorail train pulling into newly opened subterranean station in Washington, D.C. with crowd on platform taking photos.

Congressman Proposes Bill to Rename DC Metro “Trump Train”

The Make Autorail Great Again Act would withhold federal funding to the system until the Washington Metropolitan Area Transit Authority (WMATA), rebrands as the Washington Metropolitan Authority for Greater Access (WMAGA).

June 2, 2025 - The Hill

Large crowd on street in San Francisco, California during Oktoberfest festival.

The Simple Legislative Tool Transforming Vacant Downtowns

In California, Michigan and Georgia, an easy win is bringing dollars — and delight — back to city centers.

June 2, 2025 - Robbie Silver

Man in teal shirt opening door to white microtransit shuttle with cactus graphics and making inviting gesture toward the camera.

Albuquerque’s Microtransit: A Planner’s Answer to Food Access Gaps

New microtransit vans in Albuquerque aim to close food access gaps by linking low-income areas to grocery stores, cutting travel times by 30 percent and offering planners a scalable model for equity-focused transit.

June 13 - U.S. Department Of Transportation

Group of people at table set ouf with picnic food on street during a neighborhood block party.

This City Will Pay You to Meet Your Neighbors

A North Kansas City grant program offers up to $400 for residents to throw neighborhood block parties.

June 13 - The Kansas City Star

Crowd gathered with protest signs on April 5, 2025 on steps of Minnesota state capitol protesting Trump cuts to social security and other federal programs.

Commentary: Our Silence Will Not Protect Us

Keeping our heads down and our language inoffensive is not the right response to the times we’re in. Solidarity and courage is.

June 13 - Shelterforce Magazine