Mississippi Sales Tax on Services, Installation, etc Mississippi: Sales Tax Handbook

Mississippi:

What purchases are taxable in Mississippi?

The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Mississippi sales tax.

Section 1: Taxability of Goods and Services

What transactions are generally subject to sales tax in Mississippi?

In the state of Mississippi, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. Several examples of exceptions to this tax are some medical devices, certain prescription medications, and some items that are used in the manufacturing business.

This means that an individual in the state of Mississippi who sells computer equipment and video games would be required to charge sales tax, but an individual who owns a store which sells manufacturing equipment is required to charge sales tax.


Are services subject to sales tax in Mississippi?

In the state of Mississippi, services are not generally considered to be taxable. While most services are exempt from tax, there are a few exceptions. For example, a service who's work includes creating or manufacturing a product, or installing or repairing any previously sold product, it is very likely considered to be taxable, and thus you would most likely have to pay sales tax on the service.

You can find a table describing the taxability of common types of services later on this page.

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Are shipping & handling subject to sales tax in Mississippi?

In the state of Mississippi, the laws regarding tax on shipping and handling costs are relatively simple. Essentially, if the item being shipped to the buyer is considered to be taxable then the shipping cost is usually considered to be taxable as well, and if the item being shipped is not taxable, then the shipping cost is not considered taxable either.

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Are drop shipments subject to sales tax in Mississippi?

"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Mississippi, drop shipments are generally exempt from sales taxes. Any drop shipper in the state of Mississippi is required to collect tax from out-of-state retailers unless the Mississippi consumer is considered to be any of the following: a direct pay permit holder; an individual identified as a licensed dealer who is making any type of purchase which is specifically intended for resale; or an exempt entity which is able to provide an applicable exemption certificate to the drop shipper in question.

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Section 2: Taxability of Various Items in Mississippi

This table shows the taxability of various goods and services in Mississippi. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.

Category Exemption Status
Amazon Purchases
Products on Amazon.com EXEMPT
Clothing
General Clothing TAXABLE *
Food and Meals
Catering TAXABLE *
Grocery Food TAXABLE
Leases and Rentals
Motor Vehicles TAXABLE *
Tangible Media Property TAXABLE
Manufacturing and Machinery
Machinery TAXABLE *
Raw Materials EXEMPT
Utilities & Fuel TAXABLE *
Medical Goods and Services
Medical Devices EXEMPT *
Medical Services EXEMPT
Medicines TAXABLE *
Newspapers and Magazines
Newspapers EXEMPT *
Periodicals TAXABLE *
Occasional Sales
General Occasional Sales EXEMPT
Motor Vehicles TAXABLE *
Optional Maintenance Contracts
General Optional Maintenance Contracts TAXABLE *
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts EXEMPT
Pollution Control Equipment
General Pollution Control Equipment EXEMPT *
Services
Janitorial Services EXEMPT
Transportation Services EXEMPT
Software and Digital Products
Canned Software - Delivered on Tangible Media TAXABLE
Canned Software - Downloaded TAXABLE
Custom Software - Delivered on Tangible Media TAXABLE
Custom Software - Downloaded TAXABLE
Customization of Canned Software TAXABLE
Digital Products TAXABLE
Trade-Ins
General Trade-Ins EXEMPT
Vending Machine Sales
Food EXEMPT *
Merchandise TAXABLE

* See notes in category taxability page for details



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** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/mississippi/sales-tax-taxability