Mississippi is one of the cheapest states in the country to start and keep a business in. The filing fee is low, the required annual report has no fee for in-state LLCs, and the income tax is on a multi-year path toward disappearing entirely. Here's what it takes to start a business in Mississippi in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Mississippi. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Mississippi Secretary of State, Business Services, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Mississippi by filing a Certificate of Formation with the Secretary of State, entirely online. The filing fee is $50, and most filings are confirmed the same day.
Every LLC needs a registered agent with a physical Mississippi address, available during business hours. You can act as your own agent, or hire a commercial service.
Mississippi doesn't require an operating agreement to be filed with the state, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file a Certificate of Formation. If you're operating under a trade name, requirements vary depending on where in Mississippi you're located.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Mississippi doesn't issue a single general statewide business license either. What you need depends on your industry and city: professional licensing for regulated fields, local permits in some cities, and sales tax registration with the Department of Revenue if you sell taxable goods or services. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Mississippi taxes
Mississippi is in the middle of phasing out its income tax entirely. For 2026, the first $10,000 of taxable income is exempt, and everything above that is taxed at a flat 4%, with the rate scheduled to keep dropping in future years toward an eventual goal of 0%. Pass-through LLCs owe no separate franchise tax.
Sales tax is a flat 7% statewide, among the higher flat state rates in the country, but most counties add nothing on top, so you rarely see the double-digit combined rates common in neighboring states.
6. Stay compliant
Every Mississippi LLC files an Annual Report with the Secretary of State, due by April 15 each year, with the filing window opening January 1. For domestic (in-state) LLCs, there's no fee at all. Foreign LLCs registered to do business in Mississippi pay $250. Missing the deadline can lead to administrative dissolution, and reinstating a lapsed LLC costs $50.
Mississippi business costs at a glance
| Item | Cost |
|---|---|
| Certificate of Formation (LLC) | $50 |
| Annual Report (every year, due April 15) | Free (domestic LLCs) |
| Registered agent service (optional) | $99 to $249/year |
| EIN | Free (IRS) |
| State income tax | 0% under $10,000, 4% above |
| State sales tax | 7% flat, minimal local add-ons |
Frequently asked questions
Does Mississippi charge for its Annual Report?
No fee for domestic (in-state) LLCs; foreign LLCs registered to do business in Mississippi pay $250.
How much does it cost to form an LLC in Mississippi?
$50 for a Certificate of Formation, with most filings confirmed the same day.
Is Mississippi phasing out its income tax?
Yes, the first $10,000 of taxable income is exempt for 2026, with the rate above that scheduled to keep dropping toward an eventual goal of 0%.
How high is sales tax in Mississippi?
A flat 7% statewide, among the higher flat state rates, but most counties add nothing on top.
When is Mississippi's Annual Report due?
By April 15 each year, with the filing window opening January 1.
Fees and rates above come from the Mississippi Secretary of State and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Mississippi-licensed attorney or CPA about your specific situation.