Mississippi
No state has ended personal income taxes since 1980, but Mississippi and Kentucky may change that
About 45 years have passed since a U.S. state last eliminated its income tax on wages and salaries. But with recent actions in Mississippi and Kentucky, two states now are on a path to do so, if their economies keep growing.
The push to zero out the income tax is perhaps the most aggressive example of a tax-cutting trend that swept across states as they rebounded from the COVID-19 pandemic with surging revenues and historic surpluses.
But it comes during a time of greater uncertainty for states, as they wait to see whether President Donald Trump’s cost cutting and tariffs lead to a reduction in federal funding for states and a downturn in the overall economy.
Some fiscal analysts also warn the repeal of income taxes could leave states reliant on other levies, such as sales taxes, that disproportionately affect the poor.
The 16th Amendment to the U.S. Constitution grants Congress the power to levy income taxes. It was ratified by states in 1913. Since then, most states have adopted their own income taxes.
Eight states currently charge no personal income tax: Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas and Wyoming. A ninth state, Washington, charges no personal income tax on wages and salaries but does tax certain capital gains income over $270,000.
When Alaska repealed its personal income tax in 1980, it did so because state coffers were overflowing with billions of dollars in oil money.
Though income tax eliminations have been proposed elsewhere, they have not been successful.
“It’s a lot easier to go without an individual income tax if you’ve never levied one,” said Katherine Loughead, a senior analyst and research manager at the nonprofit Tax Foundation. “But once you become dependent on that revenue, it is a lot more difficult to phase out or eliminate that tax.”
Republican Mississippi Gov. Tate Reeves recently signed a law gradually reducing the state’s income tax rate from 4% to 3% by 2030 and setting state revenue growth benchmarks that could trigger additional incremental cuts until the tax is eliminated. The law also reduces the sales tax on groceries and raises the gasoline tax.
If cash reserves are fully funded and revenue triggers are met each year, Mississippi’s income tax could be gone by 2040.
Supporters of an income tax repeal hope it will attract both businesses and residents, elevating the state’s economy to the likes of Florida, Tennessee and Texas. Their theory is that when people pay less in income taxes, they will have more money to spend, thus boosting sales tax collections.
The tax repeal “puts us in a rare class of elite, competitive states,” Reeves said in a statement. He added, “Mississippi has the potential to be a magnet for opportunity, for investment, for talent –- and for families looking to build a better life.”
Mississippi is among the most impoverished states and relies heavily on federal funding. Democratic lawmakers warned the state could face a financial crises if cuts in federal funding come at the same time as state income tax reductions.
The income tax provides “a huge percentage of what the state brings in to fund things like schools and health care and services that everybody relies on,” said Neva Butkus, senior analyst at the nonprofit Institute on Taxation and Economic Policy.
A 2022 Kentucky law reduced the state’s income tax rate and set a series of revenue-based triggers that could gradually lower the tax to zero. But unlike in Mississippi, the triggers aren’t automatic. Rather, the Kentucky General Assembly must approve each additional decrease in the tax rate.
That has led to a series of tax-cutting measures, including two new laws this year. One implements the next tax rate reduction from 4% to 3.5% starting in 2026. The second makes it easier to continue cutting the tax rate in the future by allowing smaller incremental reductions if revenue growth isn’t sufficient to trigger a 0.5 percentage point reduction.
Democratic Gov. Andy Beshear signed the legislation for next year’s tax cut but let the other measure passed by the Republican-led legislature become law without his signature. Beshear called it a “bait-and-switch” bill, contending lawmakers had assured the guardrails for income tax reductions would remain in place while pushing for the 2026 tax cut, then later in the session altered the triggers for future years.
New Hampshire and Tennessee already did not tax income from wages and salaries, but both states had taxed certain types of income.
In 2021, Tennessee ended an income tax on interest from bonds and stock dividends that had been levied since 1929.
New Hampshire halted its tax on interest and dividends at the start of this year.
Some other states also are pushing to repeal income taxes The Oklahoma House passed legislation in March that would gradually cut the personal income tax rate to zero if revenue growth benchmarks are met. That bill now is in the Senate.
New Missouri Gov. Mike Kehoe, a Republican, also wants to phase out the income tax. The House and Senate have advanced legislation that would take an incremental step by exempting capital gains income from taxes.
Mississippi
Entergy: Customers in Mississippi saving $2 billion due to construction of data centers – SuperTalk Mississippi
Electric power distribution company Entergy has announced that customers in Mississippi will save more than $2 billion on power bills due to data center projects in its service range.
Entergy Mississippi customers join those in Louisiana and Arkansas as the largest recipients of a broader $5 billion in savings. The company’s announcement comes after Amazon Web Services announced plans to build a pair of multi-billion-dollar data centers in Madison County and another in Warren County, along with AVAIO Digital settling on Rankin County as a data center destination.
While ratepayers in the areas where data centers are being constructed voiced concerns of bill hikes, Entergy Mississippi President and CEO Haley Fisackerly has maintained that the projects will have the opposite effect on the wallets of utility customers. Fisackerly added that having a big customer — like Amazon — helps offset the rising cost of powering homes, small businesses, and even healthcare facilities.
“When you don’t have growth, and 25% of your customers are below the national poverty level, affordability becomes a big concern,” Fisackerly said on MidDays with Gerard Gibert. “Just like any business or community, you need growth. You need economies of scale. By bringing in a large customer like AWS, they are bringing the volume we need, but they also bring in additional revenues that are going to allow us to invest more to improve reliability.”
Not only is the money Entergy Mississippi is bringing in from data center owners helping customers save money, but it is also going toward major grid upgrades that consumers don’t have to subsidize, Fisackerly said. Efforts by the state legislature, Gov. Tate Reeves, and the Mississippi Public Service Commission paved the way for large companies constructing data centers to contribute to a $300 million “Superpower Mississippi” campaign by Entergy to modernize and improve power lines and systems.
These grid upgrades are expected to reduce power outages, which is a plus in a state prone to year-round inclement weather events, and make services more reliable for customers.
“These large technology customers will help pay the cost for needed power grid maintenance and upgrades that would otherwise have been borne by our existing customers,” Fisackerly continued. “During a rising cost environment, when we are having to replace two half-century-old power plants with new units, securing such relief right now is perfect timing for our residential and small commercial customers.”
Though concerns remain about the environmental impacts data centers will have on the area, along with the possible noise associated with powering them, officials contend that the affordability of utilities can be erased from the list of worries.
Entergy’s existing agreements with data center owners have been structured to benefit all ratepayers, while also protecting existing customers from risks, the company announced. The company included prepayment requirements, multi-year contract terms, credit and collateral requirements, and early termination penalties in contracts with data center owners to protect existing customers.
Mississippi
Thompson defeats Turnage to highlight U.S. House primaries in Mississippi – SuperTalk Mississippi
Political newcomer and Capitol Hill attorney Evan Turnage proved no match for longtime U.S. Rep. Bennie Thompson, who defeated him and one other challenger to earn the Democratic nomination for Mississippi’s 2nd Congressional District on Tuesday.
Some politicos thought Turnage – who went to Yale and later worked for some of Thompson’s Democratic colleagues, including Senate Minority Leader Chuck Schumer (D-N.Y.) – wouldn’t necessarily win but could make waves as one of the more viable candidates to challenge Thompson in recent years. However, that wasn’t the case as Thompson garnered approximately 85% of the vote when the race was called.
Thompson, 78, is seeking an 18th term. The civil rights leader who chaired the Jan. 6 Committee was first elected in 1993 and serves as a ranking member on the House Homeland Security Committee. He will face either Ron Eller or Kevin Wilson on the Republican side, a race yet to be called as of late Tuesday night, and independent Bennie Foster in November’s general.
All of Mississippi’s U.S. House seats are up for grabs this year.
In the 1st Congressional District, Republican Rep. Trent Kelly ran unopposed, while civil rights attorney and University of Mississippi School of Law professor Cliff Johnson beat former state lawmaker Kelvin Buck in the Democratic primary. Libertarian challenger Johnny Baucom awaits Kelly and Johnson in the general.
In the 3rd Congressional District, both Republican Rep. Michael Guest and Democrat Michael Chiaradio ran unopposed. They will meet Libertarian Erik Kiehle in the general.
In the 4th Congressional District, Republican Rep. Mike Ezell had over 80% of the vote when his race was called against former Mississippi Department of Marine Resources officer and political staffer Sawyer Walters. State Rep. Jeffrey Hulum easily won the Democratic nomination over Paul Blackman and D. Ryan Grover. Ezell and Hulum will face independent Carl Boyanton in the general.
Arguably the most watched races of the night occurred in the state’s lone U.S. Senate seat in this year’s cycle. Republican Sen. Cindy Hyde-Smith had no problem with Ocean Springs doctor Sarah Adlakha, seeing her name bolded around 30 minutes after the polls closed. It wasn’t long after that when Lowndes County District Attorney Scott Colom was announced the winner of the Democratic primary over Priscilla Till and Albert Littell. Independent Ty Pinkins will meet Hyde-Smith and Colom in the general on Nov. 3.
The Associated Press contributed to this report.
Mississippi
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