Franchise Tax

Franchise Tax in Mississippi: Complete Guide 2026

Updated 2026-03-12

Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.

Franchise Tax in Mississippi: Complete Guide 2026

Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.

Mississippi imposes a franchise tax on every corporation, LLC, and certain other entities doing business in or organized under the laws of the state. The tax is based on the value of capital employed in Mississippi, calculated as the greater of the entity’s book value of assets or appraised value of property within the state. Mississippi’s franchise tax is a flat rate per thousand dollars of capital, and it applies broadly to both corporations and LLCs — unlike many states where LLCs are exempt from franchise-style taxes.

Mississippi Franchise Tax Rates (2026)

Entity TypeRateBaseMinimum Tax
Corporations~$2.50 per ~$1,000 of capitalCapital employed in Mississippi~$25
LLCs and other entities~$2.50 per ~$1,000 of capitalCapital employed in Mississippi~$25

The flat rate of ~$2.50 per ~$1,000 translates to an effective rate of approximately ~0.25% of capital employed in the state. There is no maximum cap on the tax, meaning large enterprises with substantial Mississippi-based assets can face significant franchise tax obligations.

How the Mississippi Franchise Tax Works

Who Must Pay

Mississippi’s franchise tax applies broadly to:

  • Domestic and foreign corporations
  • Limited liability companies (LLCs)
  • Limited partnerships (LPs)
  • Business trusts
  • Any other entity required to register with the Mississippi Secretary of State

Sole proprietorships and general partnerships composed entirely of natural persons are generally exempt. Nonprofit organizations and certain agricultural cooperatives may also qualify for exemptions.

Calculating Capital Employed in Mississippi

The franchise tax base is the value of capital employed in Mississippi, determined as the greater of:

  1. Book value of capital — total assets as shown on the entity’s balance sheet, without any deduction for liabilities or debt
  2. Appraised value — the fair market value or assessed value of property located in Mississippi

For multistate entities, capital is apportioned to Mississippi using a ratio of Mississippi property and assets to total property and assets. The key distinction is that Mississippi uses the greater of book value or appraised value, which can produce a higher base than net-worth-based systems used by other states.

No Deduction for Liabilities

Unlike many states that compute franchise tax on net worth (assets minus liabilities), Mississippi’s franchise tax is based on total capital without deducting debt. This means a heavily leveraged company with ~$10,000,000 in assets and ~$9,000,000 in debt would owe franchise tax on the full ~$10,000,000, not on the ~$1,000,000 of equity. This feature can create a disproportionate burden on capital-intensive or debt-heavy businesses.

Filing Requirements

RequirementDetail
Filing deadlineApril ~15 for calendar-year filers (~15th day of the ~4th month after fiscal year-end)
ExtensionAvailable upon request with timely estimated payment
Minimum tax~$25
Filing methodFiled as part of the Mississippi corporate income/franchise tax return (Form ~83-105 for corporations, Form ~84-105 for pass-through entities)

Comparison to Other State Franchise Taxes

StateTax TypeRateBaseCap
MississippiFranchise tax~$2.50 per ~$1,000 (~0.25%)Capital employed (gross assets)None
TennesseeFranchise tax~0.25%Greater of net worth or propertyNone
LouisianaFranchise tax~0.15%—~0.30%Net worth + borrowed capitalNone
GeorgiaNet worth tax~0.05%—~0.20%Georgia-apportioned net worth~$10,000
TexasFranchise (margin) tax~0.375%—~0.75%Revenue minus deductionsNone

Mississippi’s use of gross capital (without deducting liabilities) makes its effective rate higher than the nominal ~0.25% suggests for many businesses, particularly those with significant debt.

Tips for Minimizing Mississippi Franchise Tax

  1. Minimize assets located in Mississippi. Since the tax is based on capital employed in the state (the greater of book value or appraised value), reducing Mississippi-based assets directly reduces the tax base.
  2. Review the apportionment ratio. Multistate entities should ensure the property apportionment ratio accurately reflects the proportion of assets in Mississippi versus other states.
  3. Evaluate entity structure. Unlike many states, Mississippi taxes LLCs and partnerships (except all-natural-person general partnerships). Consider whether restructuring could reduce franchise tax exposure.
  4. Monitor appraised vs. book value. If the appraised value of Mississippi property significantly exceeds book value, the tax base may be higher than expected. Consider whether asset appraisals are accurate and current.
  5. File on time. Late filing penalties are approximately ~5% per month, up to ~25% of the tax due, plus interest from the original due date.
  6. Claim available exemptions. Mississippi offers exemptions for certain qualifying industries, new businesses in designated enterprise zones, and entities participating in economic incentive programs. Verify eligibility with the Mississippi Department of Revenue.
  7. Plan for the no-liability-deduction rule. Since debt is not subtracted from the tax base, businesses should factor the franchise tax cost into financing decisions for Mississippi operations.

Key Takeaways

  • Mississippi’s franchise tax is ~$2.50 per ~$1,000 of capital employed in the state (approximately ~0.25%), with a minimum of ~$25 and no maximum cap
  • The tax applies broadly to corporations, LLCs, LPs, and business trusts — not just corporations
  • Capital is calculated as the greater of book value or appraised value, without deducting liabilities or debt, creating a broader base than net-worth-based systems
  • Multistate entities apportion capital to Mississippi using a property ratio
  • Sole proprietorships and all-natural-person general partnerships are generally exempt
  • Mississippi’s no-deduction-for-debt rule can create disproportionate burdens on highly leveraged businesses

Next Steps