Published: May 2, 2023

Mississippi Joins Other States and Enacts Temporary Storage Exemption/Exclusion


Effective July 1, 2023, tangible personal property sold in Mississippi and first used in another state will be exempt from the Mississippi sales and use tax.

The bill introducing this amendment, H.B. 549, was signed into law by Mississippi Governor Tate Reeves on March 22 after it unanimously passed both the House and the Senate back in February and mid-March of this year.

Mississippi joins other states across the U.S. that already have what is referred to as a “temporary storage exemption or exclusion.” Mississippi’s law goes further and adds that “training of or inspection by the purchaser with respect to the” product prior to it being shipped or transported out of the state does not constitute first use of the product within Mississippi. This is a very seller-friendly amendment to the Mississippi sales and use tax law, potentially encouraging warehouse and manufacturing operators to conduct more business in the state. It may also allow a consumer to control where they first use and ultimately pay a sales or use tax on the product, such as in a state with a lower sales and use tax rate where they may have operations.

However, at the same time, this law change does create a little more complexity for sellers and consumers alike when it comes to sales and use tax sourcing of products being stored inside of Mississippi and then shipped to a destination for first use outside of the state.

The advisors here at Clarus Partners can help answer any questions that you may have about this tax law change to see how this law may apply to you and to help ensure you remain compliant with your sales and use tax reporting.