Mississippi LLC Taxes Explained: Flat 4.0% (2026)
Mississippi's state income tax is refreshingly simple — a flat 4.0% on income above $10,000, and it's scheduled to keep dropping every year through 2030. Here's every layer your LLC touches, with an estimator that shows exactly what you'll owe.
A default Mississippi LLC is a pass-through: profits land on your personal return, with the first $10,000 exempt and everything above taxed at a flat 4.0% (2026) — scheduled to drop to 3.75% in 2027 and continue falling toward 3.0% by 2030. Add 15.3% federal self-employment tax on 92.35% of net profit. The LLC owes no entity-level income tax by default; Mississippi's franchise tax applies only to LLCs that elect corporate taxation, and it's being fully repealed for tax years beginning on or after January 1, 2028. Sellers collect 7% sales tax statewide. Around $60–80K profit, model an S-Corp election.
- State income tax
- 4.0% flat above $10K (2026)
- Rate trajectory
- Dropping to 3.0% by 2030
- Entity-level tax (default)
- None
- Franchise tax
- Only if taxed as a corporation
- Sales tax
- 7% statewide
- S-Corp threshold
- ~$60–80K profit
The 4 Layers of Mississippi LLC Taxation
Federal: income + self-employment tax
Pass-through profits hit your 1040 at your federal bracket, plus 15.3% SE tax on 92.35% of net profit — usually the biggest line.
Mississippi state income tax: flat 4.0% (2026)
The first $10,000 of income is exempt; everything above is taxed at one flat rate — no brackets to navigate. Scheduled to keep dropping through 2030.
Entity level: usually nothing
No franchise or entity income tax on default pass-through LLCs. The exception: LLCs that elect corporate taxation may owe the franchise tax — fully repealed starting with tax years beginning on or after January 1, 2028.
Sales tax: 7% (if applicable)
Flat statewide, minimal local add-ons in most areas. See Step 7.
Estimate Your Combined Bill
Mississippi LLC Tax Estimator
Single-member default taxation · flat 4.0% above $10K · educational estimate
The Falling Rate — Plan Ahead
| Tax Year | Rate (Above $10K Exemption) |
|---|---|
| 2026 | 4.0% |
| 2027 | 3.75% |
| 2028 | 3.5% |
| 2029 | 3.25% |
| 2030+ | 3.0% (eventual target: 0%) |
Under the Build Up Mississippi Act, the state's income tax rate is on a legislated downward path, with the long-term goal of eventual elimination. This is worth building into multi-year financial planning — your effective state tax rate a few years from now will likely be meaningfully lower than it is today, assuming the schedule holds.
The Franchise Tax Exception
Mississippi's franchise tax is easy to misunderstand: it does not apply to default pass-through LLCs. It only applies to LLCs that elect to be taxed as a corporation. If that's not your LLC, you can generally ignore it entirely. And even for LLCs that do elect corporate taxation, the franchise tax is being phased out — fully repealed for tax years beginning on or after January 1, 2028. Confirm your specific situation with a CPA if you've made or are considering a corporate election.
The S-Corp Question (~$60–80K Profit)
An S-Corp election changes federal taxation only: reasonable salary (payroll-taxed) plus distributions that escape the 15.3% SE tax. File Form 2553 — never Form 8832, which is the C-Corp election. Mississippi generally conforms to federal S-Corp elections, with income passing through to shareholders' individual returns. Break-even lands around $60–80K of consistent profit after payroll and accounting costs. Distributions still face Mississippi's flat income tax as income — the election shields SE tax, not income tax. Run your numbers in the S-Corp election guide.
Your Mississippi Tax Calendar
| Date | What's Due |
|---|---|
| Quarterly (Jan/Apr/Jun/Sep) | Estimated taxes — federal and Mississippi, on pass-through profit |
| Apr 15 | Annual report to the Secretary of State ($0 domestic / $250 foreign) — window opens Jan 1 |
| Mar 15 | Form 1065 (multi-member LLCs) + K-1s |
| Apr 15 | Form 1040 + Mississippi individual return |
| Monthly/Quarterly | Sales tax returns via TAP per your assigned schedule |
Ahmad Adil's Take: Mississippi's tax picture is one of the simplest and most founder-friendly in this whole series — a flat rate, a real exemption on the first $10K, no entity-level tax unless you've specifically elected corporate treatment, and a legislated schedule that keeps lowering your bill every year through 2030. My rule for Mississippi clients: set aside roughly 26–29% of profit to cover SE tax plus the state's flat rate, and revisit that number down slightly each January as the scheduled rate cut takes effect. This is a state where the tax math genuinely gets easier over time instead of more complicated — enjoy it.
- ✓Forms your Mississippi LLC for $39 + the $50 state fee
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Mississippi LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. The figures here — the $50 Certificate of Formation, the free annual report due April 15, and Mississippi’s flat 4.0% income tax on earnings above $10,000 — reflect current Mississippi Secretary of State and Department of Revenue guidance. This is educational content, not legal or tax advice.
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