Wine, seafood, e-cigarettes also factor into big picture
The most significant tax reform legislation in state history was the marquee business event of the 2025 legislative session.
Tax reforms, spelled out in the “Build Up Mississippi Act,” House Bill 1, and in concurrence with the 2022 income tax reform legislation, makes several significant changes to Mississippi’s tax and retirement system. The new law is a step toward reducing Mississippi’s income tax to zero. It adjusts grocery and gas tax rates and introduces a new retirement system for public employees.
On July 1, the state’s personal income tax dropped by 0.25%, and tax on grocery purchases dropped from 7% to 5%. The state’s flat income tax rate will drop from 4.4% this year to 3% in 2030. More cuts to the income tax rate to zero percent will occur beginning in 2031, based on the state meeting revenue growth projections. Upon full phaseout, Mississippi should be one of only eight states that do not levy an income tax on individuals.
Through the same bill, passed by lawmakers to attract economic development opportunities while also providing tax relief to Mississippians, roughly $200 million in additional revenue for roads and bridges will be produced through a 9-cent increase in the fuel excise tax over three years.
In a move that pleases many Mississippians, Senate Bill 2145 allows winemakers to ship wine directly to them. Prior to its passage, the Magnolia State was one of only three states prohibiting the direct shipment of wines to its residents.
Also beginning July 1, all seafood and crawfish sold in Mississippi must be clearly labeled imported or domestic (HB 602). The Mississippi Department of Marine Resources (MDMR) and the Mississippi Department of Agriculture and Commerce (MDAC) have been tasked with inspecting grocery stores, seafood markets, restaurants, and food trucks to ensure compliance.
Requiring Efficiency for our Colleges and Universities System and Education System (REFOCUSES) Act, also referred to as an anti-DEI bill, became law July 1. It prevents universities, community colleges, public schools, and charter schools from using Diversity, Equity, and Inclusion (DEI) practices when selecting faculty, providing academic opportunities, and offering student engagement.
In somewhat quiet fashion, lawmakers passed HB 916, which requires consumers using e-cigarettes to buy exclusively from only three manufacturers—Logic Technology Development LLC (owned by Japan Tobacco International), NJOY LLC (part of Altria and Philip Morris USA), and R.J. Reynolds Vape Company—and bans all flavored vaping products. Manufacturers of vape products sold in the state must be approved by the U.S. Food and Drug Administration. Partly resulting from Altria and R.J. Reynolds’ strong lobbying arms, 10 states have enacted similar measures.
Legislative redistricting plans call for 15 special elections—a primary election this month and a general election in November—to better reflect newly drawn majority-minority districts in the House and Senate.
Governor Tate Reeves did not approve the Medicaid Technical Amendments Bill (SB 2867) that would have expanded Medicaid.
Also, Reeves vetoed watered-down Certificate-Of-Need (CON) reform legislation that would have raised the limit for a medical facility to seek a CON when acquiring certain medical equipment. It also would have required the Mississippi Department of Health to study other changes needed to CON laws, especially related to small hospitals’ dialysis units, geriatric psychiatric units, and acute adult psychiatric units.
What didn’t pass in the recent session: A flurry of education bills, including The Tim Tebow Act, aka HB 1617, which would’ve allowed homeschooled children to participate in extracurricular activities at their local public schools. Early and absentee voting legislation—all 10 bills: three Senate, seven House—also did not pass.