House of Representatives has passed a significant measure to direct additional revenue to counties and municipalities and improve the state’s infrastructure.
House Bill 722 would ensure that 35 percent of the use tax collected
by the Department of Revenue would be distributed for the repair, maintenance and reconstruction of roads, streets and bridges. I joined the bill as a cosponsor because it is important for local government to have additional resources to maintain local roads and bridges. HB722 also meets one of the Madison
County Business League & Foundation’s top priorities: increasing the funds received by local communities based on sales originating there. The
bill was passed by the House earlier in the Session, and this week was transmitted to the Senate.
Use tax is a tax on purchases made outside of Mississippi on taxable items to be used in Mississippi, and on which no sales tax was collected in the state
of purchase. Use tax on internet purchases is one form of use tax that received a good bit of debate last year, as more online retailers such as Amazon
began collecting the tax and remitting it to Mississippi last year. Currently uses taxes on online sales must be declared and paid by individuals on
income tax returns. Unlike regular sales taxes, which are partly returned to municipalities where sales are made, 100% of use tax revenue goes into
the state’s General Fund.
HB722 changes that. The bill allocates 35 percent of use taxes collected to local government, for use on local infrastructure. The 35 percent of use tax
collected by the Department of Revenue would be split three ways, with 15 percent given to municipalities, 15 percent given to counties and five percent
given to a grant program administered by the Mississippi Development Authority to assist the municipalities and counties with improvements. The 15
percent given to municipalities would be distributed each year based on the proportion of sales tax each municipality receives. The 15 percent set
aside for counties will be put into a special fund created by the State Treasurer to be expended by the Office of State Aid Road Construction to individual
counties. Of the money provided to the counties, one-third would be allocated in equal shares among the counties, one-third would be allocated to each
county based on the its proportion of rural road miles to the rest of the state, and one-third would be allocated based on the county’s proportion
of rural population to the rest of the state. Finally, the last five percent would be put into a different special fund as part of the State Treasury
to be distributed by the Mississippi Development Authority as grants to municipalities and counties.
Overall, this would mean that approximately $108 million would be returned to our local communities, and dedicated to improving the state’s infrastructure.
The bill passed the House by a bipartisan vote of 118-0, and now awaits Senate consideration. For more, visit www.corywilson.ms/current-legislation/.