MISSISSIPPI LEGISLATURE
2024 Regular Session
To: Finance
By: Senator(s) DeBar, Polk
AN ACT TO AMEND SECTION 27-65-111, MISSISSIPPI CODE OF 1972, TO EXEMPT FROM THE STATE SALES TAX RETAIL SALES OF FOOD OR DRINK FOR HUMAN CONSUMPTION ELIGIBLE FOR PURCHASE WITH FOOD STAMPS ISSUED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE OR OTHER FEDERAL AGENCY; TO CLARIFY THAT THIS EXEMPTION FROM THE STATE SALES TAX SHALL NOT AFFECT A SALES TAX LEVIED BY A MUNICIPALITY UNDER THIS ACT; TO AUTHORIZE ANY MUNICIPALITY TO LEVY A TAX OF NO MORE THAN 1% ON RETAIL SALES OF FOOD OR DRINK FOR HUMAN CONSUMPTION ELIGIBLE FOR PURCHASE WITH FOOD STAMPS ISSUED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE OR OTHER FEDERAL AGENCY, BUT ONLY WHEN SUCH FOOD OR DRINK IS PURCHASED WITHOUT THE USE OF FOOD STAMPS ISSUED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE OR OTHER FEDERAL AGENCY; TO GRANT THE MUNICIPALITY THE DISCRETION TO LEVY THE TAX EITHER BY THE AUTHORITY OF ITS RESOLUTION OR BY CALLING AN ELECTION ON THE QUESTION; TO GRANT THE MUNICIPALITY THE SAME DISCRETION IN ADJUSTING THE RATE OF THE TAX AND IN REPEALING THE TAX, REGARDLESS OF WHICH METHOD IT USED FOR THE INITIAL LEVY; TO AMEND SECTION 27-65-241, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE ABOVE; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-65-111, Mississippi Code of 1972, is amended as follows:
27-65-111. The exemptions from the provisions of this chapter which are not industrial, agricultural or governmental, or which do not relate to utilities or taxes, or which are not properly classified as one (1) of the exemption classifications of this chapter, shall be confined to persons or property exempted by this section or by the Constitution of the United States or the State of Mississippi. No exemptions as now provided by any other section, except the classified exemption sections of this chapter set forth herein, shall be valid as against the tax herein levied. Any subsequent exemption from the tax levied hereunder, except as indicated above, shall be provided by amendments to this section.
No exemption provided in this section shall apply to taxes levied by Section 27-65-15 or 27-65-21.
The tax levied by this chapter shall not apply to the following:
(a) Sales of tangible personal property and services to hospitals or infirmaries owned and operated by a corporation or association in which no part of the net earnings inures to the benefit of any private shareholder, group or individual, and which are subject to and governed by Sections 41-7-123 through 41-7-127.
Only sales of tangible personal property or services which are ordinary and necessary to the operation of such hospitals and infirmaries are exempted from tax.
(b) Sales of daily or weekly newspapers, and periodicals or publications of scientific, literary or educational organizations exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1954, as it exists as of March 31, 1975, and subscription sales of all magazines.
(c) Sales of coffins, caskets and other materials used in the preparation of human bodies for burial.
(d) Sales of tangible personal property for immediate export to a foreign country.
(e) Sales of tangible personal property to an orphanage, old men's or ladies' home, supported wholly or in part by a religious denomination, fraternal nonprofit organization or other nonprofit organization.
(f) Sales of tangible personal property, labor or services taxable under Sections 27-65-17, 27-65-19 and 27-65-23, to a YMCA, YWCA, a Boys' or Girls' Club owned and operated by a corporation or association in which no part of the net earnings inures to the benefit of any private shareholder, group or individual.
(g) Sales to elementary and secondary grade schools, junior and senior colleges owned and operated by a corporation or association in which no part of the net earnings inures to the benefit of any private shareholder, group or individual, and which are exempt from state income taxation, provided that this exemption does not apply to sales of property or services which are not to be used in the ordinary operation of the school, or which are to be resold to the students or the public.
(h) The gross proceeds of retail sales and the use or consumption in this state of drugs and medicines:
(i) Prescribed for the treatment of a human being by a person authorized to prescribe the medicines, and dispensed or prescription filled by a registered pharmacist in accordance with law; or
(ii) Furnished by a licensed physician, surgeon, dentist or podiatrist to his own patient for treatment of the patient; or
(iii) Furnished by a hospital for treatment of any person pursuant to the order of a licensed physician, surgeon, dentist or podiatrist; or
(iv) Sold to a licensed physician, surgeon, podiatrist, dentist or hospital for the treatment of a human being; or
(v) Sold to this state or any political subdivision or municipal corporation thereof, for use in the treatment of a human being or furnished for the treatment of a human being by a medical facility or clinic maintained by this state or any political subdivision or municipal corporation thereof.
"Medicines," as used in this paragraph (h), shall mean and include any substance or preparation intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment or prevention of disease and which is commonly recognized as a substance or preparation intended for such use; provided that "medicines" do not include any auditory, prosthetic, ophthalmic or ocular device or appliance, any dentures or parts thereof or any artificial limbs or their replacement parts, articles which are in the nature of splints, bandages, pads, compresses, supports, dressings, instruments, apparatus, contrivances, appliances, devices or other mechanical, electronic, optical or physical equipment or article or the component parts and accessories thereof, or any alcoholic beverage or any other drug or medicine not commonly referred to as a prescription drug.
Notwithstanding the preceding sentence of this paragraph (h), "medicines" as used in this paragraph (h), shall mean and include sutures, whether or not permanently implanted, bone screws, bone pins, pacemakers and other articles permanently implanted in the human body to assist the functioning of any natural organ, artery, vein or limb and which remain or dissolve in the body.
The exemption provided in this paragraph (h) shall not apply to medical cannabis sold in accordance with the provisions of the Mississippi Medical Cannabis Act and in compliance with rules and regulations adopted thereunder.
"Hospital," as used in this paragraph (h), shall have the meaning ascribed to it in Section 41-9-3, Mississippi Code of 1972.
Insulin furnished by a registered pharmacist to a person for treatment of diabetes as directed by a physician shall be deemed to be dispensed on prescription within the meaning of this paragraph (h).
(i) Retail sales of automobiles, trucks and truck-tractors if exported from this state within forty-eight (48) hours and registered and first used in another state.
(j) Sales of tangible personal property or services to the Salvation Army and the Muscular Dystrophy Association, Inc.
(k) From July 1, 1985, through December 31, 1992, retail sales of "alcohol-blended fuel" as such term is defined in Section 75-55-5. The gasoline-alcohol blend or the straight alcohol eligible for this exemption shall not contain alcohol distilled outside the State of Mississippi.
(l) Sales of tangible personal property or services to the Institute for Technology Development.
(m) The gross proceeds of retail sales of food and drink for human consumption made through vending machines serviced by full-line vendors from and not connected with other taxable businesses.
(n) The gross proceeds of sales of motor fuel.
(o) * * *
Retail sales of food or drink for human consumption eligible for purchase with
food stamps issued by the United States Department of Agriculture or other federal
agency. This exemption shall not affect a sales tax levied by a municipality under
Section 1 of this act when such food or drink is purchased without the use of food
stamps issued by the United States Department of Agriculture or other federal agency.
(p) Sales of cookies for human consumption by the Girl Scouts of America no part of the net earnings from which sales inures to the benefit of any private group or individual.
(q) Gifts or sales of tangible personal property or services to public or private nonprofit museums of art.
(r) Sales of tangible personal property or services to alumni associations of state-supported colleges or universities.
(s) Sales of tangible personal property or services to National Association of Junior Auxiliaries, Inc., and chapters of the National Association of Junior Auxiliaries, Inc.
(t) Sales of tangible personal property or services to domestic violence shelters which qualify for state funding under Sections 93-21-101 through 93-21-113.
(u) Sales of tangible personal property or services to the National Multiple Sclerosis Society, Mississippi Chapter.
(v) Retail sales of food for human consumption purchased with food instruments issued the Mississippi Band of Choctaw Indians under the Women, Infants and Children Program (WIC) funded by the United States Department of Agriculture.
(w) Sales of tangible personal property or services to a private company, as defined in Section 57-61-5, which is making such purchases with proceeds of bonds issued under Section 57-61-1 et seq., the Mississippi Business Investment Act.
(x) The gross collections from the operation of self-service, coin-operated car washing equipment and sales of the service of washing motor vehicles with portable high-pressure washing equipment on the premises of the customer.
(y) Sales of tangible personal property or services to the Mississippi Technology Alliance.
(z) Sales of tangible personal property to nonprofit organizations that provide foster care, adoption services and temporary housing for unwed mothers and their children if the organization is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code.
(aa) Sales of tangible personal property to nonprofit organizations that provide residential rehabilitation for persons with alcohol and drug dependencies if the organization is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code.
( * * *ab) (i) Retail sales of an article of
clothing or footwear designed to be worn on or about the human body and retail sales
of school supplies if the sales price of the article of clothing or footwear or
school supply is less than One Hundred Dollars ($100.00) and the sale takes place
during a period beginning at 12:01 a.m. on the last Friday in July and ending at
12:00 midnight the following Saturday. This paragraph ( * * *ab) shall not apply to:
1. Accessories including jewelry, handbags, luggage, umbrellas, wallets, watches, briefcases, garment bags and similar items carried on or about the human body, without regard to whether worn on the body in a manner characteristic of clothing;
2. The rental of clothing or footwear; and
3. Skis, swim fins, roller blades, skates and similar items worn on the foot.
(ii) For purposes of
this paragraph ( * * *ab),
"school supplies" means items that are commonly used by a student in a
course of study. The following is an all-inclusive list:
1. Backpacks;
2. Binder pockets;
3. Binders;
4. Blackboard chalk;
5. Book bags;
6. Calculators;
7. Cellophane tape;
8. Clays and glazes;
9. Compasses;
10. Composition books;
11. Crayons;
12. Dictionaries and thesauruses;
13. Dividers;
14. Erasers;
15. Folders: expandable, pocket, plastic and manila;
16. Glue, paste and paste sticks;
17. Highlighters;
18. Index card boxes;
19. Index cards;
20. Legal pads;
21. Lunch boxes;
22. Markers;
23. Notebooks;
24. Paintbrushes for artwork;
25. Paints: acrylic, tempera and oil;
26. Paper: loose-leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board and construction paper;
27. Pencil boxes and other school supply boxes;
28. Pencil sharpeners;
29. Pencils;
30. Pens;
31. Protractors;
32. Reference books;
33. Reference maps and globes;
34. Rulers;
35. Scissors;
36. Sheet music;
37. Sketch and drawing pads;
38. Textbooks;
39. Watercolors;
40. Workbooks; and
41. Writing tablets.
(iii) From and after
January 1, 2010, the governing authorities of a municipality, for retail sales occurring
within the corporate limits of the municipality, may suspend the application of
the exemption provided for in this paragraph ( * * *ab) by adoption of a resolution to that
effect stating the date upon which the suspension shall take effect. A certified
copy of the resolution shall be furnished to the Department of Revenue at least
ninety (90) days prior to the date upon which the municipality desires such suspension
to take effect.
( * * *ac) The gross proceeds of sales of tangible
personal property made for the sole purpose of raising funds for a school or an
organization affiliated with a school.
As used in this paragraph ( * * *ac), "school" means any public
or private school that teaches courses of instruction to students in any grade from
kindergarten through Grade 12.
( * * *ad) Sales of durable medical equipment
and home medical supplies when ordered or prescribed by a licensed physician for
medical purposes of a patient. As used in this paragraph ( * * *ad), "durable medical equipment"
and "home medical supplies" mean equipment, including repair and replacement
parts for the equipment or supplies listed under Title XVIII of the Social Security
Act or under the state plan for medical assistance under Title XIX of the Social
Security Act, prosthetics, orthotics, hearing aids, hearing devices, prescription
eyeglasses, oxygen and oxygen equipment. Payment does not have to be made, in whole
or in part, by any particular person to be eligible for this exemption. Purchases
of home medical equipment and supplies by a provider of home health services or
a provider of hospice services are eligible for this exemption if the purchases
otherwise meet the requirements of this paragraph.
( * * *ae) Sales of tangible personal property
or services to Mississippi Blood Services.
( * * *af) (i) Subject to the provisions of
this paragraph ( * * *af),
retail sales of firearms, ammunition and hunting supplies if sold during the annual
Mississippi Second Amendment Weekend holiday beginning at 12:01 a.m. on the last
Friday in August and ending at 12:00 midnight the following Sunday. For the purposes
of this paragraph ( * * *af),
"hunting supplies" means tangible personal property used for hunting,
including, and limited to, archery equipment, firearm and archery cases, firearm
and archery accessories, hearing protection, holsters, belts and slings. Hunting
supplies does not include animals used for hunting.
(ii) This paragraph
( * * *af)
shall apply only if one or more of the following occur:
1. Title to and/or possession of an eligible item is transferred from a seller to a purchaser; and/or
2. A purchaser
orders and pays for an eligible item and the seller accepts the order for immediate
shipment, even if delivery is made after the time period provided in subparagraph
(i) of this paragraph ( * * *ffaf), provided that the purchaser has not requested or
caused the delay in shipment.
( * * *ag) Sales of nonperishable food items
to charitable organizations that are exempt from federal income taxation under Section
501(c)(3) of the Internal Revenue Code and operate a food bank or food pantry or
food lines.
( * * *ah) Sales of tangible personal property
or services to the United Way of the Pine Belt Region, Inc.
( * * *ai) Sales of tangible personal property
or services to the Mississippi Children's Museum or any subsidiary or affiliate
thereof operating a satellite or branch museum within this state.
( * * *aj) Sales of tangible personal property
or services to the Jackson Zoological Park.
( * * *ak) Sales of tangible personal property
or services to the Hattiesburg Zoo.
( * * *al) Gross proceeds from sales of food,
merchandise or other concessions at an event held solely for religious or charitable
purposes at livestock facilities, agriculture facilities or other facilities constructed,
renovated or expanded with funds for the grant program authorized under Section
18, Chapter 530, Laws of 1995.
( * * *am) Sales of tangible personal property
and services to the Diabetes Foundation of Mississippi and the Mississippi Chapter
of the Juvenile Diabetes Research Foundation.
( * * *an) Sales of potting soil, mulch, or other
soil amendments used in growing ornamental plants which bear no fruit of commercial
value when sold to commercial plant nurseries that operate exclusively at wholesale
and where no retail sales can be made.
( * * *ao) Sales of tangible personal property
or services to the University of Mississippi Medical Center Research Development
Foundation.
( * * *ap) Sales of tangible personal property
or services to Keep Mississippi Beautiful, Inc., and all affiliates of Keep Mississippi
Beautiful, Inc.
( * * *aq) Sales of tangible personal property
or services to the Friends of Children's Hospital.
( * * *ar) Sales of tangible personal property
or services to the Pinecrest Weekend Snackpacks for Kids located in Corinth, Mississippi.
( * * *as) Sales of hearing aids when ordered
or prescribed by a licensed physician, audiologist or hearing aid specialist for
the medical purposes of a patient.
( * * *at)
Sales exempt under the Facilitating Business Rapid Response to State Declared Disasters
Act of 2015 (Sections 27-113-1 through 27-113-9).
( * * *au) Sales of tangible personal property
or services to the Junior League of Jackson.
( * * *av) Sales of tangible personal property
or services to the Mississippi's Toughest Kids Foundation for use in the construction,
furnishing and equipping of buildings and related facilities and infrastructure
at Camp Kamassa in Copiah County, Mississippi. This paragraph ( * * *av) shall stand repealed on July 1, 2025.
( * * *aw) Sales of tangible personal property
or services to MS Gulf Coast Buddy Sports, Inc.
( * * *ax) Sales of tangible personal property
or services to Biloxi Lions, Inc.
( * * *ay) Sales of tangible personal property
or services to Lions Sight Foundation of Mississippi, Inc.
( * * *az) Sales of tangible personal property
and services to the Goldring/Woldenberg Institute of Southern Jewish Life (ISJL).
( * * *ba) Sales of coins, currency, and bullion.
For the purposes of this paragraph ( * * *ba), the following words and phrases shall
have the meanings ascribed in this paragraph ( * * *ba) unless the context clearly indicates
otherwise:
(i) "Bullion" means a bar, ingot, or coin:
1. Manufactured, in whole or in part, of gold, silver, platinum, or palladium;
2. That was or is used solely as a medium of exchange, security, or commodity by any state, the United States Government, or a foreign nation; and
3. Sold based on the intrinsic value of the bar, ingot, or coin as a precious metal or collectible item rather than its form or representative value as a medium of exchange.
(ii) "Coin or currency" means a coin or currency:
1. Manufactured, in whole or in part, of gold, silver, other metal, or paper;
2. That was or is used solely as a medium of exchange, security, or commodity by any state, the United States Government, or a foreign nation; and
3. Sold based on the intrinsic value of the coin or currency as a precious metal or collectible item rather than its form or representative value as a medium of exchange.
"Coin or currency" does not include a coin or currency that has been incorporated into jewelry.
SECTION 2. (1) The governing authorities of any municipality are authorized, in their discretion, to levy and collect a tax, which shall be in addition to all other taxes and assessments imposed, of no more than one percent (1%) on retail sales of food or drink for human consumption eligible for purchase with food stamps issued by the United States Department of Agriculture or other federal agency, but only when such food or drink is purchased without the use of food stamps issued by the United States Department of Agriculture or other federal agency.
(2) Persons, firms or corporations liable for the levy imposed under subsection (1) of this section shall add the amount of the levy to the sales price of the products set out in subsection (1) of this section and shall collect, insofar as is practicable, the amount of the tax due by them from the person receiving the product at the time of payment therefor.
(3) The tax shall be collected by and paid to the Department of Revenue on a form prescribed by the Department of Revenue in the manner that state sales taxes are computed, collected and paid; and full enforcement provisions and all other provisions of Title 27, Chapter 65, Mississippi Code of 1972, shall apply as necessary to the implementation and administration of this act.
(4) The proceeds of the tax, less three percent (3%) thereof which shall be retained by the Department of Revenue to defray the cost of collection, shall be paid to the governing authorities of the municipality on or before the fifteenth day of the month following the month in which collected.
(5) Before any tax authorized under this act may be imposed, the governing authorities of the municipality shall adopt a resolution declaring their intention to levy the tax and setting forth the amount of the tax to be imposed, the date upon which the tax shall become effective, and the municipal fund into which the proceeds of the tax shall be paid. In addition, the resolution shall either specify that the tax shall become effective by the authority of the resolution, or call for an election to be held on the question. If the resolution calls for an election:
(a) Notice of the intention to levy the tax and of the election shall be published either:
(i) Once each week for at least three (3) consecutive weeks in a newspaper published or having a general circulation in the municipality, with the first publication of the notice to be made not less than twenty-one (21) days before the date fixed in the resolution for the election and the last publication to be made not more than seven (7) days before the election; or
(ii) On the municipality's website or, if the municipality does not have a website, its official social media webpage, to remain available to the public for the duration of the twenty-one (21) days immediately preceding the date fixed in the resolution for the election; and
(b) At the election, all qualified electors of the municipality may vote, and the ballots used in the election shall have printed thereon a brief statement of the amount of the tax, the date upon which the tax shall become effective, and the municipal fund into which the proceeds of the tax shall be paid, together with the words "FOR THE TAX" and, on a separate line, "AGAINST THE TAX." The voters shall vote by marking their choice on the proposition. When the results of the election shall have been canvassed and certified, the municipality may levy the tax if at least sixty percent (60%) of the qualified electors who vote in the election vote in favor of the tax.
(6) At least thirty (30) days before the effective date of the tax provided in this section, the municipal governing authorities shall furnish to the Department of Revenue a certified copy of the resolution evidencing the tax.
(7) A tax imposed under this section may have its rate adjusted or may be repealed by the same procedures governing the levying of the tax in subsections (5) and (6) of this section. The municipality shall have the same discretion as to the method of effectuating the adjustment or repeal, whether by the authority of the resolution itself or by an election, as it has under subsection (5) of this section regarding the initial levy, regardless of which method it used to effectuate the initial levy.
SECTION 3. Section 27-65-241, Mississippi Code of 1972, is amended as follows:
27-65-241. (1) As used in this section, the following terms shall have the meanings ascribed to them in this section unless otherwise clearly indicated by the context in which they are used:
(a) "Hotel" or "motel" means and includes a place of lodging that at any one time will accommodate transient guests on a daily or weekly basis and that is known to the trade as such. Such terms shall not include a place of lodging with ten (10) or less rental units.
(b) "Municipality" means any municipality in the State of Mississippi with a population of one hundred fifty thousand (150,000) or more according to the most recent federal decennial census.
(c) "Restaurant" means and includes all places where prepared food is sold and whose annual gross proceeds of sales or gross income for the preceding calendar year equals or exceeds One Hundred Thousand Dollars ($100,000.00). The term "restaurant" shall not include any nonprofit organization that is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code. For the purpose of calculating gross proceeds of sales or gross income, the sales or income of all establishments owned, operated or controlled by the same person, persons or corporation shall be aggregated.
(2) (a) Subject to the provisions of this section, the governing authorities of a municipality may impose upon all persons as a privilege for engaging or continuing in business or doing business within such municipality, a special sales tax at the rate of not more than one percent (1%) 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.
(b) The tax levied under this section shall apply to every person making sales of tangible personal property or services within the municipality but shall not apply to:
(i) 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;
(ii) Gross proceeds of sales or gross income of restaurants derived from the sale of food and beverages;
(iii) Gross proceeds of sales or gross income of hotels and motels derived from the sale of hotel rooms and motel rooms for lodging purposes;
* * *
( * * *iv) Gross income of businesses engaging
or continuing in the business of TV cable systems, subscription TV services, and
other similar activities, including, but not limited to, cable Internet services;
( * * *v) Wholesale sales of food and drink for
human consumption sold to full service vending machine operators; and
( * * *vi) Wholesale sales of light wine, light
spirit product, beer and alcoholic beverages.
(3) (a) Before any tax authorized under this section may be imposed, the governing authorities of the municipality shall adopt a resolution declaring its intention to levy the tax, setting forth the amount of the tax to be imposed, the purposes for which the revenue collected pursuant to the tax levy may be used and expended, the date upon which the tax shall become effective, the date upon which the tax shall be repealed, and calling for an election to be held on the question. The date of the election shall be set in the resolution. Notice of the election shall be published once each week for at least three (3) consecutive weeks in a newspaper published or having a general circulation in the municipality, with the first publication of the notice to be made not less than twenty-one (21) days before the date fixed in the resolution for the election and the last publication to be made not more than seven (7) days before the election. At the election, all qualified electors of the municipality may vote. The ballots used at the election shall have printed thereon a brief description of the sales tax, the amount of the sales tax levy, a description of the purposes for which the tax revenue may be used and expended 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 (√) opposite his choice on the proposition. When the results of the election have been canvassed by the election commissioners of the municipality and certified by them to the governing authorities, it shall be the duty of such governing authorities to determine and adjudicate whether at least three-fifths (3/5) of the qualified electors who voted in the election voted in favor of the tax. If at least three-fifths (3/5) of the qualified electors who voted in the election voted in favor of the tax, the governing authorities shall adopt a resolution declaring the levy and collection of the tax provided in this section 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 to the Department of Revenue not less than thirty (30) days before the effective date of the levy.
(b) A municipality shall not hold more than two (2) elections under this subsection.
(4) The revenue collected pursuant to the tax levy imposed under this section may be expended to pay the cost of road and street repair, reconstruction and resurfacing projects based on traffic patterns, need and usage, and to pay the costs of water, sewer and drainage projects in accordance with a master plan adopted by the commission established pursuant to subsection (7).
(5) (a) The special sales tax authorized by this section shall be collected by the Department of Revenue, shall be accounted for separately from the amount of sales tax collected for the state in the municipality and shall be paid to the municipality. The Department of Revenue may retain one percent (1%) of the proceeds of such tax for the purpose of defraying the costs incurred by the department in the collection of the tax. Payments to the municipality shall be made by the Department of Revenue on or before the fifteenth day of the month following the month in which the tax was collected. However, if a municipality fails to comply with the audit, reporting and/or report filing requirements of paragraph (b) of this subsection and does not remedy such noncompliance within thirty (30) days after receiving written notice of noncompliance, the Department of Revenue shall withhold payments otherwise payable to the municipality under this paragraph (a) until the department receives written notice that the municipality has complied with such requirements.
(b) The proceeds of the special sales tax shall be placed into a special municipal fund apart from the municipal general fund and any other funds of the municipality, and shall be expended by the municipality solely for the purposes authorized in subsection (4) of this section. The records reflecting the receipts and expenditures of the revenue from the special sales tax shall be provided in detail to the members of the commission monthly, to include the name of the vendor and the project, and the dates and amounts received and paid, and shall also be audited annually by an independent certified public accountant. The accountant shall make a report of his findings to the governing authorities of the municipality and file a copy of his report with the Secretary of the Senate and the Clerk of the House of Representatives and the commission members. The audit shall be made and completed as soon as practical after the close of the fiscal year of the municipality, and expenses of the audit shall be paid from the funds derived by the municipality pursuant to this section.
(c) Any expenditure from the special municipal fund defined in paragraph (b) above that was not for a project approved by the commission, or was in excess of the amount approved by the commission, shall be reimbursed by the city to the special fund.
(d) All provisions of the Mississippi Sales Tax Law applicable to filing of returns, discounts to the taxpayer, remittances to the Department of Revenue, 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 special 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 under this section, or for noncompliance with the provisions of this section, shall be paid to the municipality 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 a municipality or any payment of the tax to a municipality in error may be adjusted by the Department of Revenue on any subsequent payment to the municipality pursuant to the provisions of the Mississippi Sales Tax Law. The Department of Revenue may, from time to time, make such rules and regulations not inconsistent with this section as may be deemed necessary to carry out the provisions of this section, and such rules and regulations shall have the full force and effect of law.
(6) If a municipality expands its corporate boundaries, the governing authorities of the municipality may not impose the special sales tax in the annexed area unless the tax is approved at an election conducted, as far as is practicable, in the manner provided in subsection (3) of this section, except that only qualified electors in the annexed area may vote in the election.
(7) (a) Any municipality that levies the special sales tax authorized under this section shall establish a commission as provided for in this section. Expenditures of revenue from the special sales tax authorized by this section shall be in accordance with a master plan adopted by the commission pursuant to this subsection.
(b) The commission shall be composed of ten (10) voting members who shall be known as commissioners appointed as follows:
(i) Four (4) members representing the business community in the municipality appointed by the local chamber of commerce for initial terms of one (1), two (2), four (4) and five (5) years respectively. The members appointed pursuant to this paragraph shall be persons who represent businesses located within the city limits of the municipality.
(ii) Three (3) members shall be appointed at large by the mayor of the municipality, with the advice and consent of the legislative body of the municipality, for initial terms of two (2), three (3) and four (4) years respectively. All appointments made by the mayor pursuant to this paragraph shall be residents of the municipality.
(iii) One (1) member shall be appointed at large by the Governor for an initial term of four (4) years. All appointments made by the Governor pursuant to this paragraph shall be residents of the municipality.
(iv) One (1) member shall be appointed at large by the Lieutenant Governor for an initial term of four (4) years. All appointments made by the Lieutenant Governor pursuant to this paragraph shall be residents of the municipality.
(v) One (1) member shall be appointed at large by the Speaker of the House of Representatives for a term of four (4) years. All appointments made by the Speaker of the House of Representatives pursuant to this paragraph shall be residents of the municipality.
(c) The terms of all appointments made subsequent to the initial appointment shall be made for five (5) years. Any vacancy which may occur shall be filled in the same manner as the original appointment and shall be made for the unexpired term.
(d) The mayor of the municipality shall designate a chairman of the commission from among the membership of the commission. The vice chairman and secretary shall be elected by the commission from among the membership of the commission for a term of two (2) years. The vice chairman and secretary may be reelected, and the chairman may be reappointed.
(e) The commissioners shall serve without compensation.
(f) Any commissioner shall be disqualified and shall be removed from office for either of the following reasons:
(i) Conviction of a felony in any state court or in federal court; or
(ii) Failure to attend three (3) consecutive meetings without just cause.
If a commissioner is removed for any of the above reasons, the vacancy shall be filled in the manner prescribed in this section and shall be made for the unexpired term.
(g) A quorum shall consist of six (6) voting members of the commission. The commission shall adopt such rules and regulations as may govern the time and place for holding meetings, regular and special.
(h) The commission shall, with input from the municipality, establish a master plan for road and street repair, reconstruction and resurfacing projects based on traffic patterns, need and usage, and for water, sewer and drainage projects. Expenditures of the revenue from the tax authorized to be imposed pursuant to this section shall be made at the discretion of the governing authorities of the municipality if the expenditures comply with the master plan. The commission shall monitor the compliance of the municipality with the master plan.
(8) The governing authorities of any municipality that levies the special sales tax authorized under this section are authorized to incur debt, including bonds, notes or other evidences of indebtedness, for the purpose of paying the costs of road and street repair, reconstruction and resurfacing projects based on traffic patterns, need and usage, and to pay the costs of water, sewer and drainage projects in accordance with a master plan adopted by the commission established pursuant to subsection (7) of this section. Any bonds or notes issued to pay such costs may be secured by the proceeds of the special sales tax levied pursuant to this section or may be general obligations of the municipality and shall satisfy the requirements for the issuance of debt provided by Sections 21-33-313 through 21-33-323.
(9) This section shall stand repealed from and after July 1, 2035.
SECTION 4. This act shall take effect and be in force from and after July 1, 2024.