Gov. Reeves signs HB 1 into law to cut income tax to 3% by 2030

JACKSON, Miss. (VDN) — Gov. Tate Reeves signed House Bill 1 (HB 1), known as the “Build Up Mississippi Act,” which aims to strengthen the state’s workforce by removing taxes on wages and boosting Mississippi’s competitiveness in attracting economic development and private investment, during a ceremony at the Mississippi Governor’s Mansion on Thursday.

“I am proud to sign into law a complete elimination of the individual income tax in the state of Mississippi,” Reeves said. “Let me say that again: Mississippi will no longer tax the work, the earnings, or the ambition of its people. The legislation I’m signing today puts us in a rare class of elite, competitive states. There are only a handful of states in the country that do not tax income. Today, Mississippi joins their ranks — and in doing so, we plant our flag.”

Mississippi is currently reducing its income tax rate to 4% from a previously passed tax cut, HB 531, being phased in. Beginning in 2027, the new law will reduce that rate by .25% over four years until it reaches 3%. In 2031, the tax will only be reduced if certain revenue “growth triggers” are met. 

HB 1 also reduces the sales tax on groceries from 7% to 5% (which will go into effect July 1), raises the gasoline tax from 18.4 cents a gallon to 27.4 cents a gallon over three years to fund infrastructure and changes the contribution model of the public employee retirement system.

“This is more than a policy victory,” Reeves said. “This is a transformation. And it’s a transformation that I have believed in, fought for, and worked toward for many years — from my days as lieutenant governor to my first campaign for this office, and every legislative session since.”

He continued, “I believe in a simple idea: that government should take less so that you can keep more. That our people should be rewarded for hard work, not punished. And that Mississippi has the potential to be a magnet for opportunity, investment, talent — and for families looking to build a better life.”

Reeves spoke directly to Mississippians during the press conference, saying, “The work of your hands belongs to you. It is yours — to feed your family and invest in your home and your community. Because that’s what this is ultimately about. Not just numbers on a balance sheet, but lives.”

He added, “Generations from now, when our kids are raising families of their own in a stronger, more prosperous Mississippi, they will look back on this moment and say: this is when we took our shot. To the people of Mississippi: you are the real winners today.”

Reeves also thanked legislators, including House Speaker Jason White and Lt. Gov. Delbert Hosemann, for their efforts and collaboration on the bill.