Most Large Corporations in Mississippi Pay Zero State Income Tax
February 4th, 2011
New research from the PEER Committee provides data on corporate participation in the state’s corporate income tax. The research shows that approximately 80 percent of all corporations operating in Mississippi do not pay state corporate income tax. The PEER data also shows that 70 percent of the largest corporations (as measured by payroll withholding) do not pay corporate income taxes. The PEER Committee examined tax data from 2006-2009. The large number of corporations paying no corporate income tax is striking, especially in the years of prosperity before the recession, which affected corporate profits.
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Corporations Operating in Mississippi Paying Zero State Income Tax, 2006-2009
Corporate profits are subject to Mississippi state income taxes at the same rates and brackets as individual income taxes. The rates are 3 percent on the first $5,000, 4 percent on the next $5,000 and 5 percent on profits over $10,000. Possible reasons for not paying corporate income tax include operating at a loss or shifting profits to related corporations in other states. One way to end the practice of shifting Mississippi profits to other states would be to require related multi-state corporations to report their income together – a practice known as combined reporting.
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