Overview of Tax Change
The Mississippi Department of Revenue has released a notice regarding L. 2022, S2844, effective July 1, 2022 (reported in State Tax Update, April 26, 2022), which removed the sales tax on the wholesale purchase of alcoholic beverages.
Key Points from the Notice
- All Mississippi licensed permittees purchasing items from the Mississippi Alcoholic Beverage Control Division will no longer pay sales tax on the cost of alcoholic beverages at the time of purchase.
- Credit will be given for the sales tax paid on wholesale purchases made prior to July 1, 2022, by reporting it on the sales tax return until all of the credit has been taken.
- Sales tax will not be charged on any wholesale sales of alcoholic beverages made on or after July 1, 2022.
- This rule applies to all permit holders that make wholesale sales or purchases of alcoholic beverages.
Retail Sales Tax Responsibilities
- Permittees are still responsible for collecting and remitting sales tax on all retail sales at the regular rate of 7%.
Notice 72-22-05, Mississippi Department of Revenue, June 1, 2022
Frequently Asked Questions
What tax change did Mississippi implement for alcoholic beverage wholesalers?
The Mississippi Department of Revenue removed the sales tax on wholesale purchases of alcoholic beverages effective July 1, 2022. Licensed permittees no longer pay sales tax when buying from the Mississippi Alcoholic Beverage Control Division.
Are wholesale sellers still required to charge sales tax after July 1, 2022?
No, as of July 1, 2022, sales tax is no longer applied to any wholesale sales of alcoholic beverages in Mississippi, regardless of the seller or buyer.
Can businesses claim a credit for sales tax paid before the change?
Yes, businesses can claim a credit for any sales tax paid on wholesale purchases made before July 1, 2022. This credit can be reported on the sales tax return until fully used.
Does the removal of sales tax apply to retail alcohol sales?
No, retail sales of alcoholic beverages are still subject to the standard 7% sales tax. Permittees must continue to collect and remit this tax on all retail transactions.
Who is affected by this sales tax update?
All Mississippi permit holders who engage in wholesale sales or purchases of alcoholic beverages are affected by this change, as outlined in Notice 72-22-05.