35 Miss. Admin. Code Pt. IV, Subpt. 9, Ch. 03 — Ice Sales and Ice Manufacturers

100 Sales
101 The gross proceeds of sales of bagged or block ice are taxable at the five percent
(5%) rate of sales tax; however, sales of ice made to a licensed retailer for resale are
wholesale sales and not subject to sales tax.
102 Sales of ice to be used as a refrigerant in grocery stores, service stations, hotels
(except hotel restaurants), creameries, and beer parlors are taxable at the regular
retail rate of tax. Sales of ice to railroad and trucking companies for the purpose of
icing interstate or intrastate shipments, or sales to industrial users are considered as
sales for consumption and are taxable at the regular retail rate.
103 Sales of ice to commercial fishermen purchased for use in the preservation of
seafood are exempt from sales tax pursuant to Miss. Code Ann. Section 27 -65-
103(a).
104 Sales of ice to manufacturers, retailers or processors for use in packing a product for
preservation or shipment or when used directly in processing are exempt from sales
tax pursuant to Miss. Code Ann. Sections 27-65-5(3) and 27-65-101(a) and (b).
Examples of such usage would be ice used by meat packers in making sausage or in
processing chickens or by a bakery in making bread. Sales of ice to producers for
use in the refrigeration of vegetables for market are also exempt.
105 Sales of other tangible personal property by ice plants such as ice boxes, fruits,
vegetables, produce or any other commodities are taxable at the regular retail rate
with no deductions allowed for delivery charges or expenses. Sales of these items to
licensed retailers for resale are wholesale sales and are not subject to the sales tax.
106 Sales of ice vending machines, ice makers and other similar equipment to cafes,
hotels, motels, service stations, etc., are taxable at the regular retail rate of sales or
use tax.
107 Charges for public storage are taxable at the regular retail rate pursuant to Miss.
Code Ann. Section 27 -65-23. Charges for public storage of goods that are
temporarily stored in this state pending shipping or mailing of the property to
another state are exempt from tax.
108 (Reserved)
200 Purchases
201 Ice manufacturers are required, with certain exceptions, to obtain a direct pay permit
as provided by Miss. Code Ann. Section 27 -65-93. The direct pay permit shall be
used to report and remit the applicable sales and use tax due on all purchases of
tangible personal property, utilities and services directly to the state in lieu of
payment to the vendor.
202 Owners of self -contained ice manufacturing/dispensing houses will not be issued a
direct pay permit. The ice house owner may apply to the Department for a letter
authorizing water utility companies to sell water used as a raw material exempt from
sales tax and authorizing electricity utility companies to sell electricity used in the
ice house exempt.
203 Purchases by ice manufacturers of shipping materials (bags, twine, etc.) to
accompany goods sold where possession passes to the customer are exempt from
sales or use tax pursuant to Miss. Code Ann. Section 27-65-101(a).
204 Raw materials (water) and processing chemicals (ammonia) used in manufacturing
ice are exempt from tax pursuant to Miss. Code Ann. Section 27 -65-101(b). Water
must be separately metered from any other usage.
205 Purchases of electrical power or other fuels used directly in the manufacturing
process are exempt while manufacturing machinery or machine parts used directly
in the manufacturing process are taxable at the reduced one -and-one-half percent
(1½%) rate of tax.
206 Purchases of self -contained ice manufacturing/dispensing houses are taxable at the
reduced one -and-one-half percent (1½%) rate of tax only on that portion of the
purchase price that is directly involved in the manufacturing of the ice. The
remaining portion of the purchase price will be taxable at the regular retail rate of
tax. Adequate records must be maintained to substantiate the portion of the purchase
price that is related to the manufacturing components of the ice house.
207 Purchases of all other equipment and supplies (ice picks, hooks, delivery bags not
sold with ice, etc.) are taxable at the regular retail rate of tax.
208 Rental or lease by ice manufacturers of tangible personal property is taxed at the
same rates as sales of the same property.
209 (Reserved)
35.IV.9.03 revised effective August 8, 2025