StructuredSales.org
StructuredSales.org
In 2026 Mississippi taxes individual taxable income above $10,000 at 4%, and a narrow kind of business-interest sale at zero. A Sunflower County family deeding cropland held in their own names owes the 4% plus federal tax. A sale of stock in a Mississippi corporation, or of a domestic Mississippi LLC interest, held more than a year, may owe the state nothing if section 27-7-9(f)(10) fits, and still owe the IRS. Installment reporting changes the Mississippi bill only when the state is taxing the gain.
Read the rate and the nonrecognition rule from the code. The slogan that Mississippi does not tax business sales covers some business sales. Not the land, not the equipment, not a short holding period, and not after losses from similar sales have eaten the exclusion.
Section 27-7-5 sets the individual rates. For calendar year 2026 and after, taxable income above $10,000 is taxed at 4%. The first $10,000 is not taxed. The Department of Revenue's withholding tables revised January 13, 2026 print the same schedule. Calendar year 2025 was 4.4% on income over $10,000. Calendar year 2024 was 4.7%. There is no separate long-term capital-gains rate. Mississippi follows federal classification of capital versus ordinary gain and then applies its own rates to both.
Once other income has filled the $10,000 band, the next dollar of taxable gain costs 4 cents. Spreading $750,000 of land gain does not create new zero brackets if each year is already past $10,000. The Mississippi total stays about 4%. What changes is the year of payment, and the rate if the Legislature cuts it. The statute says the Legislature intended to consider further decreases after 2026, and that the tax stands repealed if a future decrease removes it. That is not a repeal yet. Model 4%. A 2026 payment on a 2024 sale is taxed at 4%, not at 2024's 4.7%.
Section 27-7-9(f)(10) says no gain is recognized on authorized shares in Mississippi-domiciled financial institutions and domestic corporations, or on interests in domestic limited partnerships and domestic LLCs, held more than one year. Gain otherwise excluded is reduced by losses from the same kind of sale in the year of the gain or the two years before or after. A later loss can shrink an exclusion already claimed.
Domestic and domiciled in Mississippi are doing real work in the statute. An interest in a Delaware LLC that operates a Mississippi plant is not, on the face of the subsection, a domestic Mississippi limited liability company. Shares of a corporation formed somewhere else are not shares of a domestic corporation. Sell at eleven months and the rule does not apply. If the contract conveys the land, the ponds, and the equipment, you have sold assets.
When the nonrecognition rule fits, Mississippi installment treatment has nothing left to do on that gain. The federal installment sale can still spread the IRS bill. When the rule does not fit, the 4% is real and flat, and the illustration below is the one to use.
Federal tax does not follow subsection (f)(10). Qualified small business stock under section 1202 is a different federal exclusion. Do not stack 1202 and the Mississippi interest rule and call it a plan. Selling a business separates those federal tools. Recapture is not hidden by subsection (f)(10), because that subsection is about gain on the interest, and a section 338 election has its own Mississippi recognition rule in section 27-7-9.
Most Delta acreage is not a share certificate. It is cotton, rice, corn, and soybean ground around Greenwood, Clarksdale, and Greenville, owned by siblings or by an LLC. A deed from individuals puts the gain in the 4% base. A sale of membership interests in a domestic Mississippi LLC at least raises subsection (f)(10), plus the buyer's liabilities problem and the federal step-up. Settle that before the letter of intent, with the farmland allocation and the inherited-basis file.
South Mississippi timber is often land plus standing trees, and section 631 can change the federal character. Ordinary timber income is not long-term gain just because the trees are old. Mississippi follows that character and then applies 4%. Poultry and catfish wells, ponds, houses, and equipment can throw off year-of-sale ordinary income under sections 1245 and 453(i). The land gain is what an installment schedule can carry.
Gulf Coast and college-town rentals in Biloxi, Ocean Springs, Oxford, and Starkville are real estate sales. Mississippi has no preferential rate. The federal comparison is a 1031 exchange or an installment sale, and for a landlord who does not want another building, selling without a 1031. Arkansas excludes half of net capital gain and, above $10 million in a year, the rest. A Mississippi seller of Mississippi land does not get that exclusion. Alabama, on the east line, has its own page.
Section 27-7-9(a)(3) expressly allows the gain portion of an installment payment to be taxed in the year received. That is the Mississippi authority for following the federal installment method on this point. Nonresidents are taxed on Mississippi-source income. Gain from real property in Mississippi stays that kind of income when it is recognized later. Moving to Tennessee, which does not tax this gain, does not repeal the Mississippi return on Delta acres.
The same payment is part interest. Interest is ordinary income, taxed at 4% once you are through the $10,000 band, and it is not eligible for subsection (f)(10). When installment obligations outstanding at year-end exceed $5 million, section 453A charges interest on the deferred federal tax. Mississippi's 4% does not erase that charge.
A married couple files jointly and owns the ground themselves, so subsection (f)(10) is not in the estimate. Other income is $60,000, already past the $10,000 zero band, so the gain is estimated at 4%. Installment-eligible long-term gain is $750,000. Recapture is ignored because it is due at closing either way. Six slices of $125,000. Federal figures use Revenue Procedure 2025-32, the $32,200 standard deduction, and 3.8% NIIT above $250,000 of modified adjusted gross income. Estimates only.
| Estimate | All in 2026 | Six annual slices |
|---|---|---|
| Federal long-term gain tax | $110,040 | $48,510 |
| Federal 3.8% NIIT | $21,280 | $0 |
| Mississippi tax at 4% | $30,000 | $30,000 |
| Combined | $161,320 | $78,510 |
About $83,000 of the difference is federal. The lump sum puts roughly $164,000 in the 20% bracket and about $560,000 of modified adjusted gross income over the NIIT line. Each $125,000 slice leaves about $71,100 in the 0% band, because taxable ordinary income is only $27,800, and the rest at 15%. Modified adjusted gross income of $185,000 stays under $250,000 here. Dividends or rent can put NIIT back on a slice. Mississippi is $30,000 either way at 4%. The table does not assume a future cut.
If the same economics were a sale of domestic Mississippi LLC interests held more than a year, and losses did not eat the exclusion, the Mississippi rows could be zero in both columns. The federal rows would remain. Run the contract you are actually signing. The tax-treatment overview and using a sale as retirement income cover the payment side. The calculator will not know whether you sold dirt or units.
For calendar year 2026, section 27-7-5 taxes individual taxable income above $10,000 at 4% and the first $10,000 at zero. The 2026 withholding tables say the same thing. There is no lower rate for long-term gains. Once other income is past $10,000, added gain is taxed at 4%. The 2025 rate above $10,000 was 4.4%. A later cut that is not enacted is not a planning assumption.
Section 27-7-9(f)(10) says no gain is recognized on authorized shares in Mississippi-domiciled financial institutions and domestic corporations, or on interests in domestic limited partnerships and domestic LLCs, held more than one year. The exclusion is reduced by losses from the same kind of sale in that year or the two years before or after. It is about those ownership interests, not the assets the company owns.
Not under that subsection. A deed of Delta farmland, pine timberland in your own name, or a Gulf Coast rental is a sale of real property, not a sale of shares or of a domestic partnership or LLC interest. That gain is in the 4% base once you are past the $10,000 band. Selling the membership interest is a different transaction. Do not retitle the farm the week of closing to chase the state rule.
Section 27-7-9(a)(3) says the gain portion of an installment payment can be taxed in the year received. The Department also says Mississippi follows federal capital-versus-ordinary classification and then applies Mississippi rates. Form 6252 timing is the timing to plan around. Interest is ordinary. Section 1245 recapture is year-of-sale ordinary income under section 453(i).
They get the rate for the year the gain is recognized, not the year you signed. The drop from 4.4% in 2025 to 4% in 2026 already works that way for payments received in 2026 on older installment obligations. The statute invites the Legislature to consider further decreases after 2026 and even says the individual income tax stands repealed if some future decrease removes the tax entirely. Until a statute actually does that, model 4% for years that are still at 4%.
Last reviewed: October 22, 2026. The example assumes an asset sale of personally held land and is an estimate.
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