MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Finance

By: Senator(s) Carter

AN ACT TO AUTHORIZE THE BOARD OF SUPERVISORS OF ANY COUNTY TO IMPOSE A SALES TAX OF NOT MORE THAN 3% ON THE GROSS PROCEEDS OF ALL SALES OR THE GROSS INCOME OF BUSINESSES IN THE COUNTY DERIVED FROM ACTIVITIES TAXED AT THE RATE OF 7% OR MORE UNDER THE MISSISSIPPI SALES TAX LAW; TO PROVIDE THAT THE GOVERNING AUTHORITIES OF ANY MUNICIPALITY IN THE COUNTY MAY PETITION THE BOARD OF SUPERVISORS TO HOLD AN ELECTION ON THE QUESTION OF A COUNTY SALES TAX LEVY AND TO REQUIRE THE BOARD OF SUPERVISORS TO HOLD SUCH ELECTION WITHIN SIX MONTHS AFTER RECEIPT OF SUCH A PETITION; TO PROVIDE THAT THE COUNTY SALES TAX SHALL NOT BE LEVIED UNLESS AUTHORIZED BY A MAJORITY OF THE VOTES CAST AT AN ELECTION TO BE CALLED AND HELD FOR SUCH PURPOSE; TO PROVIDE THAT THE SALES TAX REVENUE COLLECTED PURSUANT TO SUCH A TAX SHALL BE DISTRIBUTED TO THE COUNTY AND THE CITIES WITHIN SUCH COUNTY, TO PROVIDE THAT 50% OF THE LOCAL SALES TAX REVENUE DISTRIBUTED TO COUNTIES AND MUNICIPALITIES SHALL BE USED TO REDUCE AD VALOREM TAXES; AND TO PROVIDE METHODS TO DISCONTINUE SUCH SALES TAX; TO AMEND SECTION 27-39-321, MISSISSIPPI CODE OF 1972, TO PROHIBIT INCREASES IN AD VALOREM TAX LEVIES IN COUNTIES THAT IMPOSE A LOCAL SALES TAX PURSUANT TO THIS ACT; AND FOR RELATED PURPOSES.  

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) (a) The board of supervisors of any county is authorized to impose upon all persons as a privilege for engaging or continuing in business or doing business within such county, a sales tax at the rate of not more than three percent (3%) of the gross proceeds of sales or gross income of the business, as the case may be, derived from any of the activities taxed at the rate of seven percent (7%) or more under the Mississippi Sales Tax Law, Section 27-65-1 et seq., as provided hereinafter. The tax levied by this section shall apply to every person making sales, delivery or installations of tangible personal property or services within any county which has adopted the levy herein authorized but shall not apply to sales exempted by Sections 27-65-19, 27-65-101, 27-65-103, 27-65-105, 27-65-107, 27-65-109 and 27-65-111 of the Mississippi Sales Tax Law and shall not apply to sales of unprepared foods intended for human consumption.

(b) Notwithstanding any other provision of this section to the contrary, the maximum percentage amount of the tax levied upon an activity pursuant to this section shall be calculated so that the total amount of tax levied upon such activity pursuant to this act, the Mississippi Sales Tax Law and any local and private law, shall not exceed ten percent (10%).

(2) (a) Except as otherwise provided in paragraph (b) of this subsection, the governing authorities of any municipality in the county may petition the board of supervisors to hold an election pursuant to subsection (3) of this section. Such petition shall specify the amount of the sales tax levy proposed. The board of supervisors shall call an election pursuant to subsection (3) of this section within six (6) months after receipt of such petition.

(b) The governing authorities of a municipality whose corporate limits are in more than one (1) county must petition the board of supervisors of all the counties in which its corporate limits are located to hold an election pursuant to subsection (3) of this section in order for the provisions of paragraph (a) of this subsection to be implemented.

(c) If, pursuant to a petition from the governing authorities of a municipality, an election pursuant to subsection (3) of this section is held and the sales tax levy is authorized by a majority of the votes cast at the election, the board of supervisors shall impose such tax levy as provided in subsection (3) of this section.

(3) The tax levy authorized herein shall not be made unless authorized by a majority of the votes cast at an election to be called and held for that purpose. Notice of such election shall be given, the election shall be held and the result thereof determined, as far as is practicable, in the same manner as other elections are held in the county. At such election, all qualified electors of the county may vote. The ballots used at such election shall have printed thereon a brief description of the sales tax and the amount of the sales tax levy and the words "FOR THE LOCAL SALES TAX" AND "AGAINST THE LOCAL SALES TAX" and the voter shall vote by placing a cross (X) or check mark (U) opposite his choice on the proposition. When the results of the election have been canvassed by the election commissioners of the county and certified by them to the board of supervisors, it shall be the duty of such board of supervisors to determine and adjudicate whether or not a majority of the qualified electors who voted in such election voted against the tax. If an election results in favor of the levy, the board of supervisors shall adopt a resolution declaring the levy and collection of the tax provided in this act and shall set the first day of the second month following the date of such adoption as the effective date of the tax levy. A certified copy of this resolution together with the result of the election shall be furnished the State Tax Commission not less than thirty (30) days prior to the effective date of the levy. Any county having held an election to adopt the tax with a resulting negative vote may not hold another election on such proposition within two (2) years from the date of the last election.

(4) All county sales taxes herein authorized shall be collected by the State Tax Commission, shall be accounted for separately from the amount of sales tax collected for the state in the county, shall be allocated to the county in which collected and shall be distributed by the State Tax Commission as follows: Each municipality within the county shall receive the sales tax collected in the proportion that the population of such municipalities bears to the total population of the county according to the latest federal decennial census, and the remainder of all sales taxes collected shall be paid to the county. Payments to the counties and municipalities shall be made by the State Tax Commission on or before the fifteenth day of the month following the month in which the tax was collected. Except as otherwise provided in subsection (5) of this section, such payments may be used and expended by the counties and municipalities for any purpose for which they are authorized by law to expend funds.

(5) Fifty percent (50%) of the sales tax revenue collected and distributed in a calendar year to a county or municipality pursuant to this act shall be included in the next succeeding calendar year as ad valorem tax receipts of the county or municipality to which such money is distributed. The appropriate levying authority shall reduce the ad valorem tax levy of the county or municipality in an amount equal to the amount distributed to such county or municipality for the preceding calendar year. Such reduction shall not be less than the millage rate necessary to generate a reduction in ad valorem tax receipts equal to the sales tax revenue distributed in the preceding calendar year to the county or municipality pursuant to this act.

(6) All provisions of the Mississippi Sales Tax Law applicable to filing of returns, discounts to the taxpayer, remittances to the State Tax Commission, enforced collection, rights of taxpayers, recovery of improper taxes, refunds of overpaid taxes or other provisions of law providing for imposition and collection of the state sales tax shall apply to the county sales tax authorized by this section except where there is a conflict, in which case the provisions of this section shall control. Any damages, penalties or interest collected for the nonpayment of taxes imposed hereunder, or for noncompliance with the provisions of this section, shall be paid to the county or municipality therein in which such damages were collected on the same basis and in the same manner as the tax proceeds. Any overpayment of tax for any reason that has been disbursed to any county or municipality or any payment of the tax to any county or municipality in error may be adjusted by the State Tax Commission on any subsequent payment to the county or municipality involved pursuant to the provisions of the Mississippi Sales Tax Law. The State Tax Commission may, from time to time, make such rules and regulations not inconsistent with this section as may be deemed necessary to carry out its provisions, and such rules and regulations shall have the full force and effect of law.

(7) The board of supervisors of any county may discontinue the collection of the county sales tax by adopting a resolution to that effect. Such tax levy shall be discontinued on the first day of a month designated in the resolution, and the tax levy shall not apply to sales made on and after that date. A certified copy of the resolution shall be furnished to the State Tax Commission at least thirty (30) days prior to its effective date.

(8) If, more than one (1) year after the imposition of such sales tax, ten percent (10%) of the qualified electors of the county or fifteen hundred (1500), whichever is the lesser, shall file a written petition requesting the discontinuance of the levy of such tax, then an election on the question of discontinuance of the tax shall be called and held as provided hereinafter. The board of supervisors of the county shall call such election not less than forty-five (45) nor more than sixty (60) days after the filing of the petition. Notice of such election shall be signed by the clerk of the board of supervisors and shall be published once a week for at least three (3) consecutive weeks in at least one (1) newspaper published in such county. The first publication of such notice shall be made not less than twenty-one (21) days prior to the date fixed for such election, and the last publication shall be made not more than seven (7) days prior to such date. If no newspaper is published in such county, then such notice shall be given by publishing the same for the required time in some newspaper having a general circulation in such county and, in addition, by posting a copy of such notice for at least twenty-one (21) days next preceding such election at three (3) public places in such county. The election shall be held, as far as is practicable, in the same manner as other elections are held in counties. At such election, all qualified electors of the county may vote. The ballots used at such election shall have printed thereon a brief description of the sales tax and the amount of the sales tax levy and the words "FOR THE LOCAL SALES TAX" and "AGAINST THE LOCAL SALES TAX," and the voter shall vote by placing a cross (X) or check mark (V) opposite his choice on the proposition. When the results of the election have been canvassed by the election commissioners of the county and certified by them to the board of supervisors, it shall be the duty of such board of supervisors to determine and adjudicate whether or not a majority of the qualified electors who voted in such election voted against the tax. If a majority of the qualified electors who voted in such election voted against the tax, then such tax shall be discontinued on the first day of the second month following the election. The board of supervisors shall notify the State Tax Commission of the discontinuance of such tax pursuant to this subsection at least thirty (30) days prior to its discontinuance. If an election held pursuant to this subsection does not result in the discontinuance of such sales tax, then another election pursuant to this subsection may not be held within one (1) year of the date of such election.

SECTION 2. Section 27-39-321, Mississippi Code of 1972, is amended as follows:

27-39-321. (1) With respect to ad valorem taxes levied for each fiscal year, no political subdivision may levy ad valorem taxes in any fiscal year which would render in total receipts from all levies an amount more than the receipts from that source during any one (1) of the immediately preceding three (3) fiscal years, as determined by the levying governing authority, plus, at the option of the taxing authority, an increase not to exceed ten percent (10%) of such receipts. The additional revenue from the ad valorem tax on any newly constructed properties or any existing properties added to the tax rolls or any properties previously exempt, which were not assessed in the next preceding year and cost incurred and paid in the next preceding year in connection with reappraisal may be excluded from the ten percent (10%) increase limitation set forth herein. Taxes levied for school district purposes under any statute and taxes levied for the maintenance and/or construction of roads and bridges under Section 27-39-305 shall be excluded from the ten percent (10%) increase limitation set forth herein. Taxes levied for payment of principal of and interest on general obligation bonds issued heretofore or hereafter shall be excluded from the ten percent (10%) increase limitation set forth herein. Any additional millage levied to fund any new program mandated by the Legislature shall be excluded from the limitation for the first year of the levy and included within such limitation in any year thereafter. The limitation imposed under this subsection shall not apply to those mandatory levies enumerated in Sections 27-39-320 and 27-39-329.

(2) The limitation of this section may be increased only as provided in subsection (3) or (4) of this section or when the governing body of a political subdivision has determined the need for additional revenues, adopts a resolution declaring its intention so to do and has held an election on the question of raising the limitation prescribed in this section. The notice calling for an election shall state the purposes for which the additional revenues shall be used, the amount of the tax levy to be imposed for such purposes and period of time for which such tax levy shall be made; however, such tax levy shall not be made for more than five (5) successive years. The limitation may be increased under this subsection only if the proposed increase is approved by a majority of those voting. Subject to specific provisions of this paragraph to the contrary, the publication of notice and manner of holding the election shall be as prescribed by law for the holding of elections for the issuance of bonds by the political subdivision. Revenues derived from any taxes levied pursuant to such election shall be excluded from the tax base for the purpose of determining aggregate receipts for which the ten percent (10%) increase limitation applies.

(3) As an alternative to the procedure provided in subsection (2) of this section, the ten percent (10%) increase limitation prescribed in this section may be increased by an additional amount by the board of supervisors of any county without an election thereon if the aggregate receipts from all county levies to which this section and Sections 27-39-305 and 27-39-320 apply do not exceed one hundred ten percent (110%) of the aggregate receipts from all such levies during any one (1) of the immediately preceding three (3) fiscal years, as determined by the board of supervisors.

(4) As an alternative to the procedure provided in subsections (2) and (3) of this section, the board of supervisors of any county or the governing authorities of any municipality may, without an election thereon, increase the ad valorem tax levy to which this section applies by the greater of:

(a) An ad valorem tax levy that does not result in an aggregate levy to which this section applies in excess of twenty (20) mills; or

(b) An ad valorem tax levy that is not in excess of any aggregate levy to which this section applies in any one (1) of the immediately preceding ten (10) fiscal years.

(5) In any county where there is located a nuclear generating power plant on which a tax is assessed under Section 27-35-309(3), the term "total receipts" as used in this section shall be the portion of the "base revenue" as defined in Section 27-39-320 which is used for General Fund purposes.

(6) If a shortfall occurs in revenues from sources other than ad valorem taxes and oil and gas severance taxes budgeted for the county or municipal general fund during the 1987 fiscal year, then the county or municipality, as the case may be, may levy a special ad valorem tax for the 1988 fiscal year in an amount the avails of which shall not exceed such shortfall; provided, however, that the aggregate receipts from all ad valorem levies for the county or municipal general fund for the 1988 fiscal year shall not exceed the aggregate receipts from this source for the immediately preceding fiscal year plus an increase not to exceed twenty percent (20%).

(7) If a shortfall occurs in revenues from oil and gas severance taxes budgeted for the county or municipal general fund during the 1987 fiscal year, then the county or municipality, as the case may be, may levy a special ad valorem tax for the 1988 fiscal year in an amount the avails of which shall not exceed such shortfall. The avails of such special ad valorem tax shall not be included within the ten percent (10%) increase limitation. The ad valorem taxes levied to offset the shortfall shall be deemed to be ad valorem tax receipts produced in the 1988 fiscal year for the purposes of determining the limitation on receipts for the succeeding fiscal years.

(8) The board of supervisors of any county that adopts a sales tax levy pursuant to Section 1 of Senate Bill No. 2327, 1998 Regular Session, shall not thereafter increase any ad valorem tax levy to which subsection (1) of this section applies during any fiscal year in which such sales tax levy is imposed.

SECTION 3. This act shall take effect and be in force from and after passage.