2025 Legislative session concludes with Build Up Mississippi Act

By editor3 | April 10, 2025 |

By District 56 Representative Clay Mansell

At the Capitol, much of the debate for this session has centered around tax reform and eliminating the income tax. On March 27, Governor Tate Reeves signed HB1, also known as the “Built Up Mississippi Act,” into law. The law introduces tax changes and revenue reallocations.

Tax reform measures include:

Income Tax Reduction: The state income tax rate will decrease by 0.25% annually from 2027 to 2030, reaching 3%, with further reductions contingent on revenue growth and budget conditions, aiming for full elimination.

Grocery Sales Tax: The sales tax on groceries will drop from 7% to 5%, effective July 1, 2025.

Fuel Tax Adjustment: Gasoline and diesel taxes will increase by 9 cents over three years, reaching 27.4 cents per gallon. Beginning July 1, 2029, adjustments may occur biennially, capped at 1 cent per gallon, based on federal highway construction cost averages.

Regarding the fiscal impact of the plan, it is expected to deliver a net tax cut exceeding $1 billion. For most households, grocery tax savings will offset or surpass fuel tax increases.

The changes promote a user-based taxation system, shifting the burden from direct taxation of labor to consumption-based contributions.

The law also includes reform measures for the Public Employees’ Retirement Systems (PERS).

Current/existing PERS members will have no changes to benefits or cost-of-living adjustments (COLAs). New employees, defined as individuals hired after March 2026, will enter a Tier 5 hybrid retirement plan, integrating a reduced defined benefit with a defined contribution component, alongside additional state contributions. The new tier aims for full funding by 2064, providing long-term stability of the system and preventing a projected $20 billion deficit by 2075 under the current structure.

In other legislative action the second half of March:

HB 599 amends Mississippi law to define “child pornography” and “obscene matter” and allows individuals to bring civil lawsuits against commercial entities that knowingly publish such content online. It excludes liability for internet service providers and similar entities that are not responsible for content creation. The bill also includes a severability clause and will take effect on July 1, 2025.

HB 1063, titled the Mississippi State Employees Paid Parental Leave Act, establishes six weeks of fully paid parental leave for eligible state employees who are the primary caregivers of a child following birth or adoption. The leave must be used within twelve weeks of the qualifying event and does not count against other accrued leave. It also permits school districts and community colleges to adopt similar policies and includes provisions for notice, eligibility and coordination with the Family and Medical Leave Act.

It has been a pleasure to serve you as your Representative for this Legislative Session. I have enjoyed meeting with each of you who has visited me at the Capitol, as well as conversing with those who have called, emailed or texted me. While we will adjourn sine die on March 31, my work for our district continues year-round.

If you need to contact me, please feel free to visit ClayMansell.com for all of my contact information and other news.