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MOTOR VEHICLE AD VALOREM TAXES

Mississippi owners of vehicles with a Gross Vehicle Weight (GVW) of 10,000 lbs or less must pay motor vehicle ad valorem taxes on their vehicles at the time of registration. Motor vehicle ad valorem tax is based on the assessed value of the vehicle multiplied by the millage rate set by the local county government. (Contact your local county tax collector for the millage rates.) Assessed value has been established as 30% of the Manufacturer's Suggested Retail Price plus a reduction of a certain percentage for depreciation over 10 years. A minimum assessed value is set at $100.00 for passenger vehicles. This ad valorem tax is revenue used by the local governments. Any exemptions of the motor vehicle ad valorem tax are found in Section 27-51-41 of the Mississippi Code of 1972, Annotated.

Motor Vehicle Ad Valorem Tax Reduction Fund (Legislative Tag Credit)

In order to provide a tax break to the registered owners of Mississippi motor vehicles, the 1994 Mississippi Legislature authorized a credit to the owners in the amount of 5% of the assessed value of the motor vehicle. This credit eased the tax burden of the individual; however it created a loss in revenue to the local governments. Therefore, the Legislature created a fund to reimburse the local governments for this tax loss called the Motor Vehicle Ad Valorem Tax Reduction Fund. The revenue generated from the sales tax on motor vehicles goes into the fund. The tax loss created each month from vehicle registrations provides the figures used to reimburse the local governments each month. Every year the Department of Revenue must calculate the credit percentage based on the balance in the fund, the estimated sales tax revenue and the estimated tax loss to the local governments for the coming year. The intent of the Legislature was to maintain a minimum balance in the fund and maximum credit to the owners. 

Laws and Regulations

The following tax laws administered by the Mississippi Department of Revenue may be found at Mississippi Code at Lexis Publishing. 

  • Motor Vehicle Privilege and Excise Taxes - Mississippi Code Annotated, Title 27, Chapter 19 (27-19)
  • Ad Valorem Taxes Motor Vehicles - Mississippi Code Annotated, Title 27, Chapter 51 (27-51)

The following regulations administered by the Mississippi Department of Revenue may be found in the Mississippi Administrative Code.