The Mississippi corporate income tax rate is graduated across three brackets: 0% on the first $5,000 of taxable income, 4% on the next $5,000, and 5% on every dollar above $10,000.1Justia. Mississippi Code 27-7-5 – Imposition of the Tax The recent rate cuts you may have read about apply to individuals only. Corporations still pay the full 5% top rate. On the same return, corporations also owe a franchise tax, which is scheduled to disappear after 2027.
What a Corporation Actually Pays
The rate schedule in Mississippi Code 27-7-5 covers corporations, trusts, estates, and individuals, but the phase-down language in that statute limits the reduced rates to “taxable income of individuals.”1Justia. Mississippi Code 27-7-5 – Imposition of the Tax Individual taxpayers move to a flat 4% on income above $10,000 in 2026. The corporate brackets do not change.
For corporations, the brackets look like this:2Mississippi Department of Revenue. Business Tax Frequently Asked Questions
- 0% on the first $5,000 of Mississippi taxable income
- 4% on income from $5,001 to $10,000
- 5% on income above $10,000
A corporation with $200,000 of Mississippi taxable income owes nothing on the first $5,000, $200 on the next $5,000, and $9,500 on the remaining $190,000. Total income tax: $9,700. If a preparer runs a C corporation through the individual schedule, the return will underpay.
Mississippi has no minimum corporate income tax. A corporation with a loss owes no income tax, though the franchise tax discussed below still applies.
How Mississippi Taxable Income Differs From Federal
The rate is only half the calculation. The other half is figuring out what income the rate applies to. Mississippi defines net income under its own statute as gross income less allowable business expenses,3Justia. Mississippi Code 27-7-13 – Net Income Defined but most corporations start with federal taxable income from Form 1120 and adjust from there on Form 83-122.
The common add-backs that push Mississippi taxable income above the federal figure include:4Mississippi Department of Revenue. Corporate Income and Franchise Tax Instructions
- State, local, and foreign income taxes deducted federally
- Bonus depreciation claimed for federal purposes
- Interest on bonds issued by other states or their subdivisions, net of related expenses
- Royalty, licensing, patent, and copyright charges paid to related parties
- Capital loss carryovers used federally
- Depletion claimed above the asset’s cost basis
Corporations may subtract items Mississippi exempts, such as interest on U.S. government obligations. Whatever remains after these adjustments is the number the graduated rates apply to.
Multi-State Corporations and Apportionment
A corporation earning income both inside and outside Mississippi does not pay 5% on its worldwide profit. It apportions. For most commercial industries, Mississippi uses a single-sales-factor formula: Mississippi sales divided by total sales everywhere, applied to apportionable income. Companies with heavy in-state property and payroll but few in-state customers benefit; companies selling into Mississippi from elsewhere see more of their income captured.
One boundary worth knowing before you assume you owe: federal Public Law 86-272 shields an out-of-state corporation from Mississippi income tax if its only activity in the state is soliciting orders for tangible goods that are approved and shipped from outside Mississippi.5Multistate Tax Commission. Statement of Information Concerning Practices Under Public Law 86-272 The protection does not cover services, software licensing, or leased intangibles, and it evaporates if the company maintains an office in the state, provides repairs, trains customers, or does anything else in Mississippi beyond solicitation.
The Franchise Tax on the Same Return
Alongside the income tax, Mississippi corporations owe a franchise tax measured by the value of capital used, invested, or employed in the state. Both taxes are reported on Form 83-105. For 2026 the franchise rate is $0.50 per $1,000 of taxable capital, with the first $100,000 exempt.
The franchise tax is on the way out. It drops to $0.25 per $1,000 in 2027 and disappears for tax years 2028 and later. Until then, unlike the income tax, it is owed whether or not the corporation turns a profit.
Estimated Payments, Filing, and What Late Costs
Any corporation whose annual Mississippi income tax liability exceeds $200 must make quarterly estimated payments totaling at least 90% of the actual current-year liability.6Legal Information Institute. 35 Mississippi Code R 3-11-21-101 – Corporate Estimated Tax For a calendar-year filer, installments are due April 15, June 15, September 15, and December 15. Corporations with Mississippi taxable income of at least $1 million in any of the three preceding years cannot rely on prior-year liability except for the first installment, and any shortfall from doing so must be caught up in the second.
The return itself, Form 83-105, is due by the 15th day of the fourth month after the tax year ends,7Mississippi Department of Revenue. Corporate Income and Franchise Tax Return which is April 15 for calendar-year corporations. Form 83-180 buys an additional six months to file, but not to pay; any tax owed must accompany the extension request by the original due date.4Mississippi Department of Revenue. Corporate Income and Franchise Tax Instructions Returns and payments can be filed through the Mississippi Taxpayer Access Point.8Mississippi Department of Revenue. Corporate Income and Franchise Tax
Missing the deadlines is expensive. Mississippi Code 27-7-53 imposes:9Justia. Mississippi Code 27-7-53 – Delinquent Taxes, Failure to File
- A failure-to-file penalty of 5% of unpaid tax per month or partial month, capped at 25%, with a $100 minimum
- A failure-to-pay penalty of 0.5% per month, also capped at 25%
- Interest of 0.5% per month running from the original due date
Underpaid estimates carry their own charge: 10% of the shortfall plus 1% interest per month until paid.6Legal Information Institute. 35 Mississippi Code R 3-11-21-101 – Corporate Estimated Tax A corporation that files six months late owing $50,000 would accrue $12,500 in failure-to-file penalties (the 25% cap is reached at five months), $1,500 in failure-to-pay penalties, and $1,500 in interest — an extra $15,500 on top of the tax. Filing on time, even with a partial payment, keeps the damage small.