Despite a busy session devoted to COVID-19 relief and plugging revenue holes in the state budget, the Mississippi Legislature still found time to pass legislation that either authorized or extended local sales tax levies known as tourism taxes.
These taxes start as local bills in the legislature and require an initial referendum by the citizens of the city or the county where the tourism tax is levied on hotels, restaurants or both. If a majority of residents approve, the tax goes into effect as local businesses remit the tax to the Mississippi Department of Revenue, who then sends the revenue back to the local government.
Here are some of the new taxes or reauthorizations of existing taxes that have been approved or are being considered by the legislature this session:
House Bill 1425 would extend the repealer on the city of Fulton’s 3 percent tourism tax on hotels. The tax was set to expire this year and has been extended until 2024 after Gov. Tate Reeves signed the bill into law.
HB 1606 would authorize the city of Water Valley to impose a 2 percent tax on restaurants in the city limits if a referendum is passed by a majority of city residents. The bill is in the hands of the Local and Private Legislation Committee in the House.
HB 1590 would allow the city of Olive Branch an additional 1 percent on hotel stays in the city limits. The bill is now being considered by the House Local and Private Legislation Committee.
HB 1610 would allow the city of Petal to conduct a referendum on a 2 percent tax on hotels and restaurants in the city limits. The bill has yet to make it out of committee in the House.
HB 1631 would extend the repeal date for Houston’s 2 percent tax on restaurants and hotels to 2024. It was supposed to expire this year. The bill has yet to pass out of committee.
HB 1661 would extend the city of Pearl’s 1 percent tax on restaurants and 3 percent on hotel stays until 2024 and is in the hands of the Local and Private Legislation Committee.
Senate Bill 3043 would allow the city of Gautier to levy a 1 percent sales tax on retailers at the former site of Singing River Mall for improvements to the mall site that include the building of a Mississippi Songwriters Hall of Fame Museum on the 55-acre site. The Local and Private Legislation and Finance committees in the Senate are considering the bill.
Mississippi already has a Grammy museum in Cleveland and the Mississippi Arts and Entertainment Experience in Meridian.
These tourism tax bills usually benefit a city or county in a legislator’s district and are one of the last chores the Legislature wraps up before leaving town at session’s end.
The same rules that govern the passage of general and appropriation bills apply to the local bills. A three-fifths majority of both chambers are required to pass a new tax, which are pitched as temporary taxes by local leaders.
These taxes are often reauthorized by a new bill when they expire after three years without input from local voters.