SaaS Taxable in Mississippi: Understanding State Tax Code 77

Software as a Service (SaaS) has grown in popularity as a way for organizations to access software programs in the current digital era without the need for expensive hardware or license fees. But as SaaS has grown in popularity, many firms are left to question if it is taxable in Mississippi. Yes, SaaS is taxed in Mississippi, to address your question.

According to Mississippi Tax Code 77, sometimes referred to as the “Sales of Tangible Personal Property Rule,” sales tax is required for the sale of all tangible personal property, including digital commodities like SaaS. This implies that companies buying SaaS must pay sales tax on their transaction.

In Mississippi, the current state sales tax rate is 7%, and additional local taxes can apply depending on the location of the sale. For instance, the municipal sales tax rate in Jackson, Mississippi is an additional 1%, making the overall sales tax rate 8%.

With a total state and local sales tax rate of 9.55%, Tennessee has the highest percentage when it comes to sales taxes. Arkansas (9.53%), Louisiana (9.52%), Washington (9.23%), and Alabama (9.22%) are not far behind. Which state levies the lowest sales taxes?

On the other end of the scale, five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not currently impose a statewide sales tax. Sales tax rates may still be impacted by local taxes or other taxes in some of these states, though. In conclusion, despite the fact that SaaS may not be a physical good, it is nevertheless regarded as tangible personal property and is consequently liable for Mississippi sales tax. When buying SaaS, businesses should be mindful of the state’s tax laws and budget for sales tax. Additionally, businesses should examine local tax rates to make sure they are correctly estimating their total tax payment because sales tax rates might vary by area.