Tax plans by both the House and Senate are being taken up this week before Wednesday’s deadline. Both chambers entered the session with different priorities on how to modify tax law. House lawmakers have sought to fully eliminate the state income tax, and Senate lawmakers oppose raising additional taxes. Senator Josh Harkins says their income tax reduction plan now reduces the 5% tax bracket and eliminates the 4% bracket over 8 years.
“We’re bringing capital expense money, we’ve had obviously record revenues coming in, we’ve had a lot of one-time money sitting there," explains Harkins. "And what we’re doing is we are applying that to help provide some inflation relief to people not only at the grocery store but we’re also, that’s recurring revenue, but we’re doing it in the rebate and the gas tax portion of our plan.”
Harkins says he is hopeful that these changes will make the Senate plan more attractive to the House. But House lawmakers have also modified their plan to accommodate what they say is every objection they heard from the Senate. Ways and Means Chairman Trey Lamar says their plan will no longer eliminate the income tax in Mississippi to meet the Senate's demands of not raising additional taxes.
“There’s a substantial tax cut for working people in this bill right out of the gate in the first year. It’s not as large, it’s not the $1300 number we used [in the original plan] but it’s in the $800 maybe $900 range for working people. They will continue to realize income tax savings over the next 10+ years as the income tax is eliminated as well as cut their grocery tax from 7% to 4% over the next 12 years.”
Senate lawmakers have also included language in the modified House Bill to pause the state’s gas tax for six months amid inflation.
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