Mississippi Governor Tate Reeves signed S.B. 2449 into law on March 28, requiring sales and use tax to be charged on computer software and services. This law also entails an exemption for any software that is stored outside the state. The law goes into effect on July 1, 2023.
Under Section 3 of the law, computer software and services include music, games, reading materials, ringtones, and any other product delivered electronically. These will all be subject to Mississippi’s sales and use tax rate of 7%. In addition, the law provides an exemption for software located on a server outside of Mississippi. Under Section 27-67-5, any computer software maintained out-of-state and accessible only through the internet is not taxable.
This bill will impact retailers of computer software, services, and digital products who sell into the state of Mississippi. It is crucial to look at the bill to see if your products qualify as taxable or fall into the exemptions.
(Mississippi S.B. 2449, 27-67-5, Signed by Governor Tate Reeves, March 28, 2023)