AN ACT TO AMEND SECTION 27-65-111, MISSISSIPPI CODE OF 1972, TO EXEMPT FROM THE STATE SALES TAX RETAIL SALES OF GROCERIES, DEFINED AS FOOD OR DRINK FOR HUMAN CONSUMPTION ELIGIBLE FOR PURCHASE WITH FOOD STAMPS ISSUED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE OR OTHER FEDERAL AGENCY; TO AMEND SECTIONS 27-65-17, 27-65-75 AND 27-67-31, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR RELATED PURPOSES.
SB 2842, titled the Grocery Tax Elimination Act, would remove Mississippi state sales tax from retail sales of groceries. The bill defines “groceries” as food or drink for human consumption that is eligible to be purchased with USDA food stamps or other federal nutrition benefits. It amends the state sales tax exemption statute to add groceries as an exempt category and makes conforming changes to related sales tax and use tax provisions.
The bill also updates several revenue-distribution statutes to account for the new grocery exemption. In particular, it revises the way sales tax and use tax revenues are allocated to municipalities, institutions of higher learning, the Capitol Complex Improvement District, the State Aid Road Fund, the School Ad Valorem Tax Reduction Fund, and the Education Enhancement Fund, including special allocation formulas for the new grocery-tax-related revenue category. The act is set to take effect July 1, 2026.
The bill would amend Section 27-65-111 to exempt retail grocery sales from the state sales tax, which would reduce the tax burden on food purchases for Mississippi consumers and eliminate state-level sales tax on qualifying groceries. It also amends Sections 27-65-17, 27-65-75, and 27-67-31 to conform the sales tax and use tax code to the new exemption and to redirect or reallocate revenue streams that currently depend on taxable food sales. Local governments, education-related funds, and road funds would be affected through revised distribution formulas tied to the new grocery-tax category.
Based on the bill title and the absence of recorded committee debate or votes in the provided materials, the bill appears to be framed as a consumer tax-relief measure with a generally favorable policy purpose. The sponsors’ framing suggests support for lowering grocery costs and easing the tax burden on residents. No formal vote history or transcript evidence is provided here showing organized opposition or support, so the overall sentiment cannot be measured beyond the bill’s pro-relief intent.
The main likely point of contention is fiscal: exempting groceries from sales tax would reduce state revenue, and the bill responds by revising multiple distribution formulas to preserve funding flows to municipalities, schools, roads, and special funds. Another possible area of debate is whether the exemption should apply only to items eligible for federal food assistance, which creates a defined but potentially complex line between taxable and exempt food items. Stakeholders most likely to focus on these issues would be state budget officials, local governments, education and transportation fund recipients, retailers, and consumer advocates.