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Learn the fundamentals of sales tax
Do you need to collect sales tax in Mississippi?
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 states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Mississippi?
Mississippi considers a seller to have physical nexus if you have any of the following in the state:
- Owns an office or place of business
- Has employees or agents of the business who service customers in Mississippi or solicit or accept orders for merchandise
Do you have economic nexus in Mississippi?
Effective December 1, 2017, Mississippi considers vendors who make more than $250,000 in the prior 12 months in the state to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can Mississippi’s economic nexus guidance for sellers here.
Is what you’re selling taxable?
Services in Mississippi are generally not taxable. However – if the service you provide includes creating or manufacturing a product, or installing or repairing a product you’ve sold, you may have to deal with the sales tax on products.
Tangible products are taxable in Mississippi, with a few exceptions. Products that have exemptions from sales tax include certain prescription medicine, medical devices, and items used in manufacturing.
Is SaaS taxable in Mississippi?
SaaS is non-taxable in Mississippi. (Source)
How to get a sales tax permit in Mississippi
Business owners can register online at Mississippi’s “TAP” website. Mississippi encourages online sellers to register and file sales tax online.
This information is required to register for a sales tax permit in Mississippi?
- All businesses will need business name and mailing address
- Sole-proprietors need their Social security number or ITIN
- Corporations/partnerships/LLCs need their Secretary of state business ID, if applicable and their FEIN
Applying for a sales tax permit in Mississippi is free, though other business registration fees may apply.
Collecting Sales Tax
The sales tax rate you collect in Mississippi depends on whether you are based in Mississippi or out-of-state.
How to Collect Sales Tax in Mississippi if You are Based in Mississippi
Mississippi is an origin-based sales tax state. So if you live in Mississippi, collecting sales tax is fairly easy. Collect sales tax at the tax rate where your business is located.
You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator. For example, Jackson, Mississippi has a 1% local sales tax rate, which combined with the state tax rate of 7%, results in a total sales tax rate of 8%.
If you have more than one location in Mississippi, then you would base the sales tax rate you charge on the point of origin of your sale.
How to Collect Sales Tax in Mississippi if you are Not Based in Mississippi
If you are based outside Mississippi, but have sales tax nexus and are required to charge sales tax in Mississippi, you are a “remote seller” and only required to charge “use tax.” Use tax is very similar to sales tax except that it’s charged by remote sellers. Mississippi’s use tax rate is 7%. The state sales tax rate is also 7%.
Should you collect sales tax on shipping charges in Mississippi?
As long as the item you are shipping is taxable, then Mississippi considers the shipping charge a part of the sale and requires that merchants collect sales tax on the shipping charges along with the price of the item.
Read a full explanation of sales tax on shipping in Mississippi here.
When are Returns Due?
When you file and pay Mississippi sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Mississippi?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Mississippi, you will be required to file and remit sales tax either monthly, quarterly, or annually.
Mississippi sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Mississippi you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Mississippi
Calculating how much sales tax you should remit to the state of Mississippi is easy with TaxJar’s Mississippi sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Mississippi sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Mississippi
- File online – File online at the Mississippi Department of Revenue. You can remit your payment through their online system.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.