Tax rate by region Mississippi

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Mississippi VAT for SaaS: An Overview

Mississippi started charging a sales tax on software as a service (SaaS) beginning January 1, 2022, aligning with the growing trend of states taxing digital services. The standard VAT rate in the state is 7%, which is among the highest in the nation. Businesses offering SaaS services are now required to register and collect sales tax from customers in Mississippi, adding an additional layer of complexity to their tax compliance. While the state has no state-wide e-invoicing mandates, staying up-to-date on any new regulations and potential changes is crucial for businesses operating in Mississippi.

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Mississippi

Mississippi’s top income tax rate is now 5% effective January 1, 2024, as part of ongoing efforts to simplify the tax code and enhance economic growth.

Official government link: Mississippi Department of Revenue

7.00%

E-products and services VAT/Sales tax rate

Certain items

Reduced tax rate

Reverse charge mechanism for B2B sales

Not applicable in the US

Tax ID validation required

Yes

When do you have to register

If you exceed $250,000 in sales.

Online registration possible

Yes

Registration procedure

Register with the Mississippi Department of Revenue to obtain a sales tax permit.
File Form 83-105 (Mississippi Corporation Income and Franchise Tax Return) if earning Mississippi-source income.
Appoint a Mississippi registered agent if necessary

List of digital and electronic services liable for tax

SaaS, video games, digital products

Penalties

5% of unpaid tax for each month, max 25% (Late Filing); 10% of unpaid tax after 30 days (Late Payment)

Registration threshold

$250,000.00

Filing interval

Monthly, Quarterly, or Annually

Filing deadline

20th of the month

E-invoicing requirements

No state-wide e-invoicing mandate

Record keeping

Income tax returns and supporting documents: 3 years minimum, 7 years recommended

Local Rate Range

0% – 1%

How-To Guides: Mississippi SaaS VAT

Step: 1 Threshold

You’ll need to collect sales tax in Mississippi if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic.

  • Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state.
  • Economic nexus means passing a state’s economic threshold for total revenue or the number of transactions in that state.

Exceeding $250,000 in gross sales into the state over any consecutive 12-month period. No transaction count threshold (e.g., no 200-transaction rule).

 

Step: 2 Business Registration

Register via the Mississippi Department of Revenue (DOR). Remote sellers with no physical presence register for a Seller’s Use Tax account; in-state sellers register for Sales Tax.

Step: 3 TIN/VAT Number

A Sales Tax Permit / Use Tax Account Number is issued by the MS DOR. You must provide your Federal EIN (Employer Identification Number) during registration.

Step: 1 Standard Rate

The standard state rate is 7%. Local “infrastructure” taxes (up to 1%) apply in specific cities like Jackson or Tupelo.

Step: 2 VAT Formula

To calculate your tax amount, use the following formula:

 

Tax Amount = Net Price x Rate%

Step: 3 Reverse Charge (B2B)

The U.S. does not use a VAT-style “Reverse Charge.” For B2B, if a product is taxable, the seller must collect tax unless the buyer provides a valid Mississippi Resale Certificate or a Direct Pay Permit.

Step: 1 Selling B2C

As of July 1, 2023 (Senate Bill 2449), Mississippi clarified that SaaS is taxable at the 7% rate if the software is “used” or “accessed” in the state, regardless of where the server is located.

Step: 2 Selling B2B

Tax is required unless the buyer is exempt (government/non-profit) or holds a Direct Pay Permit, allowing them to self-assess use tax instead of paying the vendor.

Step: 3 Invoice Requirements

Invoices should contain: 

  • Seller Name & Address
  • Seller MS Tax Account Number
  • Buyer Name & Address
  • Date of Sale
  • Itemized Taxable Amount
  • Applied Tax Rate (7%)
  • Total Amount Due

Step: 1 Filing Interval

Interval is assigned by DOR based on liability: Monthly (over $3,600/yr), Quarterly ($600–$3,599/yr), or Annual (under $600/yr).

Step: 2 Filing Deadline

The filing deadline is the 20th day of the month following the end of the reporting period (e.g., Jan return due Feb 20).

Step: 3 Submission

Must be filed via the Mississippi Taxpayer Access Point (TAP) portal. Electronic payment (ACH Debit/Credit) is generally required.

Step: 4 Record Keeping

Tax records should be kept for a minimum of 3 years (standard audit lookback period), though 4-7 years is recommended for federal alignment.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Mississippi’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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Our team of SaaS tax experts is here to help. Contact us today for a free consultation.

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