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HB 1989

Sales tax; exempt sales of utilities to certain nonprofit organizations.

2026 Regular Session Introduced by Scott Bounds

HB 1989 exempts qualifying Mississippi nonprofits from paying sales tax on utility purchases, reducing their operating costs while decreasing state revenue.

Conference Report Adopted
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Bill Summary · HB 1989

Legislative bill overview

HB 1989 would exempt sales of utilities (electricity, water, gas, etc.) from Mississippi's sales tax when those utilities are purchased by certain nonprofit organizations. The bill narrows the tax base by allowing qualifying nonprofits to avoid paying sales tax on essential utility services.

Why is this important

Utility costs represent a significant operational expense for nonprofits providing community services like food banks, shelters, and healthcare facilities. This exemption could reduce operating costs for eligible organizations, potentially allowing them to redirect savings toward programs. However, it also reduces state tax revenue that funds public services and education.

Potential points of contention

  • Revenue impact: The state loses sales tax revenue that would normally fund education, infrastructure, and other public services—the fiscal note will clarify the magnitude
  • Definition of "certain nonprofits": Unclear which organizations qualify; broad definitions could increase costs while narrow ones may create fairness questions about which nonprofits deserve benefits
  • Precedent concerns: Expanding tax exemptions for specific groups can create pressure for additional exemptions and complicate tax administration

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

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