Do contractors charge sales tax in Mississippi?

It depends on whether the job is residential, its size and the trade. Large commercial jobs carry a 3.5% contractor's tax instead.

On non-residential jobs whose total contract price is over $10,000, Mississippi levies a 3.5% contractor's tax on the contract price. It replaces sales tax on component materials rather than adding to it. Apartments and condominiums are not residential for this tax.

The $10,000 threshold is the whole contract, not one invoice; continuing work orders and invoices count as one project. The contractor must get a Material Purchase Certificate before work begins, and contracts over $75,000 must be prepaid or bonded before work begins.

Residential jobs, and jobs of $10,000 or less, fall under the ordinary 7% sales tax, and the trade decides how. The Department's guide taxes gross income for HVAC, electrical, plumbing, grading and landscaping, and insulating, and for installed sales such as roofing, tile, glass, carpet, flooring, siding, windows, doors and fences.

For painting, drywall, masonry, carpentry and general remodeling, the contractor pays tax on materials and no sales tax is due on gross income. On a mixed job whose charges are not stated separately, the job's primary purpose decides.

It turns on: whether the job is residential or non-residential; whether the total contract is over $10,000; what trade the work is; on a mixed job, whether charges are stated separately.

“3.5% contractor's tax on contract price. No sales or use tax on purchases of component materials and services”MS DOR, Guide for Construction Contractors