Agriculture and forestry are the Magnolia State’s top earners. Half the country’s farm-raised catfish comes from Mississippi and it is also a top producer of sweet potatoes, cotton and pulpwood. Other main state industries include advanced manufacturing, trade, transportation, utilities, education and health services.
In 2019, Mississippi’s GSP (Gross State Product) was $104 billion with a 5-year persistent growth rate of 0.8%. In 2020, however, most businesses remained closed due to state lockdowns in response to the Covid-19 pandemic. Some of the most affected were small businesses (SMBs). According to a survey by Main Street America on 142 small businesses, half of the respondents have seen their income decrease by more than 75% since early March 2020.
The state legislature has approved $300 million of the state’s $1.25 billion in federal coronavirus relief funds to go towards cushioning small businesses from adverse economic setbacks.
Here are some statistics on the state of small businesses in Mississippi:
- There are 262,272 small businesses – 99.3% of all businesses in the state.
- According to a 2021 Global State of Small Business report from Facebook, 21% of Mississippi’s SMBs reported reduced employment as a result of COVID-19, which is six points less than the national average (27%).
- At the start of April 2021, 61% of small firms in Mississippi reported lower sales. Neighboring states like Tennessee (44%), Louisiana (48%) and Texas (48%) fared better.
- Small businesses employ approximately 437,242 individuals. They account for 46.5% of the state’s workforce.
- Self-employed individuals with their own incorporated businesses have an average median income of $47,000. For those without incorporated businesses, the average median income is $25,000.
- According to a survey by American Innovators, Mississippi has the fastest-growing online small businesses in the United States. Nebraska and Maine came in 2nd and 3rd respectively.
- State law requires that every new business designates a Mississippi registered agent that will be available during regular business hours at a physical address within the state.
- There 1,545 small business exporters that account for 16.4% of the state’s $11.1 billion worth of export revenue.
- To form a corporation in Mississippi, you need to file your Articles of Incorporation with the Secretary of State’s office. The filing fee is $50.
- Some services such as contractors, foresters and tattoo artists need professional licensing in Mississippi. While this isn’t a license on the business, licensing is required in order to operate.
- In 2018, Mississippi banks issued 37,420 loans under $100,000 to small business owners. The cumulative value of the loans was $625.8 million.
- The top five industries with the largest number of small businesses are:
- Other services (except public administration) – 49,356.
- Construction – 32,194.
- Administrative, support and waste management – 27,439.
- Health care and social assistance – 25,294.
- Retail Trade – 24,716.
- Mississippi taxes personal income at exactly the same rates as corporate income. There is a corporate income tax and a corporate franchise tax. The breakdown of the corporate tax rate is as follows:
- 3% on the first $1,000 – $5,000 of taxable income (minimum amount increases by $1,000 each subsequent year until 2022 at which point there is no tax on the first $5,000 of income).
- 4% on the next $5,000 of taxable income.
- 5% on income in excess of $10,000.
- The corporate franchise tax which applies to both traditional corporations and S corporations is based on a business’s net worth. For instance, the tax is computed at $2.50 per $1,000 of the greater of:
- Capital used, invested or employed in the state.
- The total assessed value of property in the state.
- Small businesses generated 9,212 net jobs in 2019. Firms with less than 20 employees added 5,108 net jobs while firms employing 20 to 99 employees created 1,091 net jobs.