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Bill

HB 395

Income tax and ad valorem tax; increase limit on amount of credits that may be allocated for certain contributions to certain charitable and foster care organizations.

2026 Regular Session

Mississippi HB 395 would raise the tax credit ceiling for donations to charitable and foster care organizations, encouraging private charitable giving at the cost of state tax revenue.

Referred To Ways and Means
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Bill Summary · HB 395

Legislative bill overview

HB 395 would increase the cap on tax credits available for donations made to charitable organizations and foster care organizations in Mississippi. The bill modifies existing incentive programs that allow taxpayers to reduce their tax liability in exchange for supporting these designated charitable causes.

Why this is important

Tax credit limits directly affect how much charitable giving can be incentivized. By raising these caps, the bill could encourage increased private funding for foster care and charitable services, potentially reducing demand on state budgets while simultaneously reducing state tax revenue. This represents a policy choice about whether to fund social services through direct state spending or incentivized private donations.

Potential points of contention

  • Revenue impact: Increasing tax credits reduces state income and reduces available funding for other state priorities, creating a trade-off that lawmakers must justify
  • Equity concerns: Tax credits primarily benefit higher-income taxpayers who can afford charitable donations and have tax liability to offset, potentially making this an inequitable subsidy
  • Charitable selection: The bill specifies which organizations qualify, raising questions about whether the chosen charities represent the most effective use of public incentives or reflect political preferences

Compiled from official sources — confirm details with the bill’s official record.

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