Mississippi Lodging Tax: Rates, Exemptions, and Filing

Mississippi’s lodging tax is a 7% state sales tax on gross income from renting rooms or short-term accommodations, and nearly every city or county with tourism adds its own levy on top. Operators collect both portions from guests and remit them to the Mississippi Department of Revenue. Whether you run a 200-room hotel on the Coast or list a spare bedroom on Airbnb, the same base rule applies.

Which Properties Owe the Tax

Mississippi Code Section 27-65-23 puts hotels, motels, tourist courts or camps, and trailer parks in the taxable category.1Justia Law. Mississippi Code 27-65-23 – Miscellaneous Businesses The Department of Revenue reads that list broadly. Under its administrative rules, any building or structure advertised as a place where sleeping accommodations are available for pay counts as a hotel or motel for tax purposes, regardless of how many rooms it has.2Mississippi Secretary of State. Subpart 5 Services Chapter 01 Hotels, Motels, and Mobile Home Parks

That reach covers single-family homes listed on rental platforms, bed-and-breakfast operations, condominiums placed in a rental pool, and cabins or cottages rented to vacationers. Advertising to the general public—whether directly or through a third-party platform—is what pulls the property in. Cooking facilities do not change the classification. If you rent to short-term guests for pay, you owe the tax.

State Rate and Local Add-Ons

The state rate is 7% of gross room revenue.1Justia Law. Mississippi Code 27-65-23 – Miscellaneous Businesses Gross income means the room charge before deductions.

On top of the state rate, most tourism-active jurisdictions impose a local lodging or tourism tax. These typically run 1% to 3%, though several stack multiple levies.3Mississippi Department of Revenue. Tourism and Economic Development Taxes A few concrete examples:

Local rates change when municipalities pass new legislation, and the local definition of “hotel” can vary. Under Section 27-65-23.1, a city or county that imposes a lodging tax through a local and private law may adopt the state’s broad definition—reaching short-term rentals and small properties—by passing a resolution.5Justia Law. Mississippi Code 27-65-23.1 – Definition of Hotel or Motel for Purposes of Certain Taxes Levied Under Authority of Local and Private Laws Check the Department’s tourism tax listing to confirm both the rate and whether your property type is captured.

When a Platform Collects for You

Since July 1, 2020, marketplace facilitators—platforms such as Airbnb, VRBO, and Booking.com—must collect and remit Mississippi sales tax on transactions they facilitate, once the platform’s total Mississippi sales exceed $250,000 in any twelve-month period.6Mississippi Legislature. HB 379 – 2020 Regular Session The Department of Revenue audits the platform directly rather than pursuing individual hosts for those bookings.

If you list exclusively through a major platform, it is likely handling the 7% state tax. Verify what the platform is collecting, and pay attention to local tourism taxes, which some platforms do not cover for every Mississippi jurisdiction. When the platform collects and remits on your behalf, you don’t report the same proceeds again on your own return, but keep records showing what the platform remitted.

Book directly through your own website, by phone, or through a platform that doesn’t collect Mississippi tax, and you remain fully responsible for the 7% and any local levies yourself.

Who Doesn’t Pay

Federal Employees on Centrally Billed Cards

Federal employees traveling on official business are not automatically exempt. The exemption turns on billing. Centrally billed accounts, where the charge goes directly to the federal agency, are exempt from Mississippi sales tax. Individually billed accounts, where the employee pays and seeks reimbursement, are not.7GSA SmartPay. Mississippi Tax Information Keep a copy of the transaction record when a guest presents a centrally billed government card. If the card is personal and the employee will be reimbursed, collect the tax.

Long-Term Stays

The lodging tax applies to transient guests. Once a guest occupies the same unit continuously for an extended period, the stay takes on a residential character and typically falls outside the tax. Many operators use 30 consecutive days as the working threshold. Keep documentation of the guest’s continuous occupancy dates to support the exemption during an audit.

Registering for a Sales Tax Permit

Before accepting your first paying guest, register with the Department of Revenue through the Taxpayer Access Point at tap.dor.ms.gov.8Mississippi Department of Revenue. Register for Taxes A separate permit is required for each business location.9Mississippi Department of Revenue. Mississippi Sales and Use Taxes

Operators without a permanent Mississippi location—a scenario that comes up with out-of-state owners of Mississippi vacation rentals—may be required to post a sales tax bond or an approved surety cash bond before the Department issues the permit.8Mississippi Department of Revenue. Register for Taxes

Registration asks for your Social Security number or federal employer identification number, business location, and estimated monthly tax liability, which sets your filing frequency. You’ll also select the city or county codes that route local tourism levies to the right jurisdiction. Getting those codes right at the start saves reconciliation trouble later.

Filing and Paying

Returns are filed and paid through TAP. The deadline is the 20th day of the month following each reporting period.9Mississippi Department of Revenue. Mississippi Sales and Use Taxes Most lodging operators file monthly, though the Department may assign quarterly or annual filing if your estimated liability is small.

Each return reports total gross room income for the period, broken out by the applicable state and local codes. Payment inside TAP accepts ACH debit from a business bank account or credit card. A successful submission generates a confirmation number. Save it. It is your proof of timely filing if the Department later asks.

Penalties for Late Filing or Non-Payment

Missing the deadline or underpaying carries real cost. The Department may impose a penalty of 10% of the tax that’s deficient or delinquent, plus interest at 0.5% per month from the due date until paid—or both.10Mississippi Department of Revenue. Business Tax Frequently Asked Questions On a $2,000 quarterly liability, that’s $200 in penalty on day one, with interest continuing to run.

Collecting tax from guests and failing to remit it is treated far more seriously than a simple filing error. The Department views withheld tax revenue as trust funds belonging to the state. If you’ve fallen behind, file and pay as quickly as possible rather than waiting for a notice, because penalties and interest keep growing until the balance is resolved.

Federal Income Tax Is Separate

Mississippi’s 7% is a state sales tax on the transaction. Your rental income also has to be reported to the IRS, and the two obligations are independent. The IRS looks at whether the activity is a business or a hobby based on factors like recordkeeping, dependence on the income, and intent to profit.11Internal Revenue Service. Here’s How to Tell the Difference Between a Hobby and a Business for Tax Purposes Rental platforms may issue a Form 1099-K when payments to you exceed $20,000 and transactions exceed 200 in a calendar year, but income below that threshold is still reportable to the IRS.12Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill One narrow federal rule under IRC Section 280A(g) lets you skip reporting rental income if you rent your personal residence 14 days or fewer during the year. Even then, you still owe Mississippi’s 7% on every taxable night.