Mississippi law lists five categories of property that are taxed for ad valorem purposes. Real property (land, buildings, and other permanent improvements to the land) is divided into the first two classes of taxable property.
Class I real property is single-family, owner-occupied, residential property. (The property class to which homestead exemption is applied.) In order for a property to qualify for Class I, it must meet each of these requirements exactly.
All other property that does not meet the exact definition for Class I falls into the Class II category.
Therefore, all agricultural property, rental property, business property, and most vacant property are considered Class II. A property
can be part Class I and part Class II.
In order to assess Class I and II properties, the assessor must first determine who owns each parcel of land in the county. This is accomplished by taking inventory of the county with a mapping system that identifies ownership from deeds, wills, court decrees, and other
documents. Once ownership is determined, the assessor visits each parcel to value the property and any buildings or other improvements that add value to the land. The assessor must accomplish this task by using guidelines provided by the Mississippi Department of
Revenue (DOR).
Class III property is business personal property. This class includes furniture, fixtures, machinery, equipment, and inventory used by a
business in its operations. The local tax assessor must list each item in every business, value the item according to DOR rules, and depreciate and revalue each item annually.
Class IV property is public utility property. Examples of public utility property include property owned by pipeline companies, electric
companies, telephone companies, railroads, etc. This property is assessed on an annual basis by the DOR.
2. Class V property is motor vehicle property (including mobile \homes). When a person purchases a motor vehicle tag in Mississippi, they actually pay three separate items: a registration fee, a privilege license, and an ad valorem tax.