HB1651 (As Introduced) - 1999 Regular Session

MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Ways and Means

By: Representative Green (34th)

House Bill 1651

AN ACT TO CREATE THE MISSISSIPPI COMMUNICATIONS TAX REFORM ACT; TO PROVIDE THAT EVERY PERSON OR ENTITY PROVIDING COMMUNICATIONS SERVICES SHALL BE ENTITLED TO A REBATE FROM THE STATE OF MISSISSIPPI IN AN AMOUNT EQUAL TO 50% OF THE AGGREGATE AMOUNT OF THE AD VALOREM TAX PAID BY SUCH PERSON OR ENTITY ON CLASS IV PROPERTY TO LOCAL TAXING DISTRICTS IN THIS STATE; TO PROVIDE THAT TO THE EXTENT POSSIBLE SUCH REFUNDS SHALL BE PAID BY THE STATE TAX COMMISSION FROM THE TELECOMMUNICATION AD VALOREM TAX REDUCTION AND LOCAL DISTRIBUTION FUND CREATED BY THIS ACT; TO PROVIDE THAT AMOUNTS IN EXCESS OF THE AMOUNTS NECESSARY TO PAY SUCH REBATES SHALL BE PAID TO MUNICIPALITIES, COUNTIES AND SCHOOL DISTRICTS; TO CREATE THE TELECOMMUNICATION AD VALOREM TAX REDUCTION AND LOCAL DISTRIBUTION FUND; TO PROVIDE THAT THE MONEY IN SUCH FUND SHALL BE UTILIZED TO PAY THE REBATES AUTHORIZED BY THIS ACT; TO PROVIDE THAT SUCH FUND SHALL BE ADMINISTERED BY THE STATE TAX COMMISSION; TO PROHIBIT POLITICAL SUBDIVISIONS FROM LEVYING ANY TAX, CHARGE OR FEE ON COMMUNICATIONS SERVICES OR COMMUNICATIONS SERVICE PROVIDERS AFTER THE EFFECTIVE DATE OF THIS ACT; TO REQUIRE THAT ALL ASPECTS OF A MUNICIPALITY'S MANAGEMENT OF THE PUBLIC RIGHTS-OF-WAY SHALL BE COMPETITIVELY NEUTRAL AND NONDISCRIMINATORY; TO REQUIRE A RATE REDUCTION BY CERTAIN COMMUNICATIONS SERVICE PROVIDERS THAT EXPERIENCE A TAX SAVING AS A RESULT OF THE PROVISIONS OF THIS ACT; TO AMEND SECTIONS 27-65-3 AND 27-65-19, MISSISSIPPI CODE OF 1972, TO REVISE THE SALES TAX ON PERSONS OPERATING TELEGRAPH AND TELEPHONE BUSINESSES TO PROVIDE THAT THE TAX IS LEVIED UPON THE AMOUNTS PAID FOR RETAIL PURCHASE OF COMMUNICATIONS SERVICES WHICH EITHER ORIGINATE OR TERMINATE IN THIS STATE; TO AMEND SECTION 27-65-75, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE PORTION OF THE SALES TAX ON COMMUNICATIONS ATTRIBUTABLE TO INTERSTATE COMMUNICATIONS SERVICES SHALL BE DEPOSITED WITHOUT DIVERSION INTO THE TELECOMMUNICATION AD VALOREM TAX REDUCTION AND LOCAL DISTRIBUTION FUND; TO AMEND SECTION 27-35-319, MISSISSIPPI CODE OF 1972, TO REMOVE PROVISIONS THAT CLASSIFY THE PROPERTY OF TELEPHONE COMPANIES LOCATED IN MORE THAN SIX COUNTIES AS CLASS IV OR CLASS II PROPERTY; TO REPEAL SECTIONS 21-33-201 THROUGH 21-33-211, MISSISSIPPI CODE OF 1972, WHICH CONSTITUTE THE CITY UTILITY TAX LAW; AND FOR RELATED PURPOSES.

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

SECTION 1. This act may be cited as the Mississippi Communications Tax Reform Act.

SECTION 2. As used in Sections 1 through 7 of this act:

(a) "Communications service" shall have the meaning ascribed to such term in Section 27-65-3.

(b) "Local exchange telephone company" shall have the meaning ascribed to such term in Section 27-65-3.

(c) "Local taxing district" means any county, municipality, school district or other local entity that levies an ad valorem tax or for which an ad valorem tax is levied, to fund all or a portion of its budget.

SECTION 3. (1) (a) Except as otherwise provided in paragraph (b) of this subsection (1), for ad valorem tax payments made after December 31, 1999, every person or entity providing communications services shall be entitled to a refund from the State of Mississippi in an amount equal to fifty percent (50%) of the aggregate amount of the ad valorem tax paid by such person or entity on Class IV property as defined in Section 112, Mississippi Constitution of 1890, to local taxing districts.

(b) For ad valorem tax payments made by local exchange telephone companies after December 31, 1999, and prior to December 31, 2000, such local exchange telephone companies shall be entitled to a refund from the State of Mississippi in an amount equal to twenty-five percent (25%) of the aggregate amount of the ad valorem tax paid by such company on Class IV property as defined in Section 112, Mississippi Constitution of 1890, to local taxing districts, thereafter any such company shall be entitled to payments in the amount provided for in paragraph (a) of this subsection (1).

(2) On or before March 15, 2000, and on or before March 15 of each year thereafter, the State Tax Commission shall pay all refunds to which communications service providers are entitled under the provisions of subsection (1) of this section for ad valorem taxes that became due on or before the first day of February immediately preceding March 15.

(3) To the extent possible, payments made pursuant to subsection (1) of this section shall be paid by the State Tax Commission out of the Telecommunication Ad Valorem Tax Reduction and Local Distribution Fund created pursuant to Section 4 of this act.

(4) On or before April 15, 2000, and on or before April 15 of each year thereafter, amounts in the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund in excess of the amounts necessary to make the payments provided for in subsection (1) of this section shall be paid to each local taxing district as follows:

(a) One-third (1/3) shall be distributed to each municipality in this state in the proportion that the amount of revenues derived from the provision of communications services in such municipality bears to the total amount of revenues derived from the provision of communications services in all municipalities in this state.

(b) One-third (1/3) shall be distributed to each school district in this state in the proportion that the average daily attendance in such school district bears to the total average daily attendance of all public school districts in the state.

(c) One-third (1/3) shall be distributed to all other local taxing districts except school districts and municipalities in the proportion that the true value of the Class IV property of communications service providers in such taxing district bears to the true value of all such property in the state.

SECTION 4. (1) There is created in the State Treasury a special fund to be known as the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund, into which shall be deposited the money specified in Section 27-65-75(17) and such other money as the Legislature may provide by appropriation. The money in the fund shall be used to pay the reasonable and necessary expenses incurred by the State Tax Commission in administering the provisions of this act as provided for in subsection (3) of this section and to make the payments provided for in Section 3 of this act.

(2) The Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund shall be administered by the State Tax Commission, and money in the fund shall be expended upon appropriation by the Legislature. Unexpended amounts remaining in the fund at the end of the state fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund. The State Tax Commission shall make the calculations necessary to make the distributions required pursuant to Section 3 of this act.

(3) A portion of the money in the fund may be utilized by the State Tax Commission to pay the reasonable and necessary expenses of the State Tax Commission incurred in administering this act. However, this amount shall not exceed one percent (1%) of the monthly amount deposited in the fund.

SECTION 5. (1) Upon the effective date of this act, no political subdivision of this state may levy any tax, charge or fee on communications services or communications service providers, or collect any such taxes, charges or fees from communications services or communications service providers.

(2) For purposes of this section, a tax, charge or fee includes any tax, charge, fee or in-kind payment of property or services, which is required by ordinance or agreement to be paid or furnished to a political subdivision by or through a provider of communications services regardless of whether such tax, charge, fee or in-kind payment of property or services is:

(a) Designated as a utility tax, franchise fee, sales tax, excise tax, user fee, occupancy fee, occupational or business license tax, subscriber charge or otherwise;

(b) Measured by the amounts charged for services or otherwise;

(d) Permitted or required to be separately stated on the customer's bill.

(3) This section shall not apply to ad valorem taxes levied as provided by law or to emergency telephone surcharges levied pursuant to Chapter 5, Title 19, Mississippi Code of 1972.

SECTION 6. All aspects of a municipality's or county's management of the public rights-of-way, including without limitation the granting or denial of construction permits and the time periods for approving such permits, shall be competitively neutral and nondiscriminatory.

SECTION 7. To the extent that a person or entity providing communications services that are regulated by the Mississippi Public Service Commission experiences a tax saving as a result of the provisions of this act, such saving shall inure proportionately to the benefit of the customers of such person or entity including residential, business and interconnection services. The Mississippi Public Service Commission shall issue a rate reduction order implementing the provisions of this section on or before December 31, 1999.

SECTION 8. Section 27-65-3, Mississippi Code of 1972, is amended as follows:

27-65-3. The words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them herein:

(a) "Tax Commission" means the State Tax Commission of the State of Mississippi.

(b) "Commissioner" means the Chairman of the State Tax Commission.

(c) "Person" means and includes any individual, firm, copartnership, joint venture, association, corporation, estate, trust or other group or combination acting as a unit, and includes the plural as well as the singular in number. "Person" shall include husband or wife or both where joint benefits are derived from the operation of a business taxed hereunder. "Person" shall also include any state, county, municipal or other agency or association engaging in a business taxable under this chapter.

(d) "Tax year" or "taxable year" means either the calendar year or the taxpayer's fiscal year.

(e) "Taxpayer" means any person liable for or having paid any tax to the State of Mississippi under the provisions of this chapter.

(f) "Sale" or "sales" includes the barter or exchange of property as well as the sale thereof for money or other consideration, and every closed transaction by which the title to taxable property passes shall constitute a taxable event.

"Sale" shall also include the passing of title to property for a consideration of coupons, trading stamps or by any other means when redemption is subsequent to the original sale by which the coupon, stamp or other obligation was created.

The situs of a sale for the purpose of distributing taxes to municipalities shall be the same as the location of the business from which the sale is made except that:

(i) Retail sales along a route from a vehicle or otherwise by a transient vendor shall take the situs of delivery to the customer.

(ii) The situs of wholesale sales of tangible personal property taxed at wholesale rates, the amount of which is allowed as a credit against the sales tax liability of the retailer, shall be the same as the location of the business of the retailer receiving the credit.

(iii) The situs of wholesale sales of tangible personal property taxed at wholesale rates, the amount of which is not allowed as a credit against the sales tax liability of the retailer, shall have a rural situs.

(iv) Income received from the renting or leasing of property used for transportation purposes between cities or counties shall have a rural situs.

(g) "Delivery charges" shall mean and include any expenses incurred by a seller in acquiring merchandise for sale in the regular course of business commonly known as "freight-in" or "transportation costs-in." "Delivery charges" also include any charges made by the seller for delivery of property sold to the purchaser.

(h) "Gross proceeds of sales" means the value proceeding or accruing from the full sale price of tangible personal property, including installation charges, carrying charges, or any other addition to the selling price on account of deferred payments by the purchaser, without any deduction for delivery charges, cost of property sold, other expenses or losses, or taxes of any kind except those expressly exempt by this chapter.

Where a trade-in is taken as part payment on tangible personal property sold, "gross proceeds of sales" shall include only the difference received between the selling price of the tangible personal property and the amount allowed for a trade-in of property of the same kind. When the trade-in is subsequently sold, the selling price thereof shall be included in "gross proceeds of sales."

"Gross proceeds of sales" shall include the value of any goods, wares, merchandise or property purchased at wholesale or manufactured, and any mineral or natural resources produced which are excluded from the tax levied by Section 27-65-15, which are withdrawn or used from an established business or from the stock in trade for consumption or any other use in the business or by the owner.

"Gross proceeds of sales" shall not include bad check or draft service charges as provided for in Section 97-19-57.

(i) "Gross income" means the total charges for service or the total receipts (actual or accrued) derived from trades, business or commerce by reason of the investment of capital in the business engaged in, including the sale or rental of tangible personal property, compensation for labor and services performed, and including the receipts from the sales of property retained as toll, without any deduction for rebates, cost of property sold, cost of materials used, labor costs, interest paid, losses or any expense whatever.

"Gross income" shall also include the cost of property given as compensation when said property is consumed by a person performing a taxable service for the donor.

However, "gross income" or "gross proceeds of sales" shall not be construed to include the value of goods returned by customers when the total sale price is refunded either in cash or by credit, or cash discounts allowed and taken on sales. Cash discounts shall not include the value of trading stamps given with a sale of property.

(j) "Tangible personal property" means personal property perceptible to the human senses or by chemical analysis as opposed to real property or intangibles and shall include property sold on an installed basis which may become a part of real or personal property.

(k) "Installation charges" shall mean and include the charge for the application of tangible personal property to real or personal property without regard to whether or not it becomes a part of the real property or retains its personal property classification. It shall include, but not be limited to, sales in place of roofing, tile, glass, carpets, drapes, fences, awnings, window air conditioning units, gasoline pumps, window guards, floor coverings, carports, store fixtures, aluminum and plastic siding, tombstones and similar personal property.

(l) "Newspaper" means a periodical which:

(i) Is not published primarily for advertising purposes and has not contained more than seventy-five percent (75%) advertising in more than one-half (1/2) of its issues during any consecutive twelve-month period excluding separate advertising supplements inserted into but separately identifiable from any regular issue or issues;

(ii) Has been established and published continuously for at least twelve (12) months;

(iii) Is regularly issued at stated intervals no less frequently than once a week, bears a date of issue, and is numbered consecutively; provided, however, that publication on legal holidays of this state or of the United States and on Saturdays and Sundays shall not be required, and failure to publish not more than two (2) regular issues in any calendar year shall not exclude a periodical from this definition;

(iv) Is issued from a known office of publication, which shall be the principal public business office of the newspaper and need not be the place at which the periodical is printed and a newspaper shall be deemed to be "published" at the place where its known office of publication is located;

(v) Is formed of printed sheets; provided, however, that a periodical that is reproduced by the stencil, mimeograph or hectograph process shall not be considered to be a "newspaper"; and

(vi) Is originated and published for the dissemination of current news and intelligence of varied, broad and general public interest, announcements and notices, opinions as editorials on a regular or irregular basis, and advertising and miscellaneous reading matter.

The term "newspaper" shall include periodicals which are designed primarily for free circulation or for circulation at nominal rates as well as those which are designed for circulation at more than a nominal rate.

The term "newspaper" shall not include a publication or periodical which is published, sponsored by, is directly supported financially by, or is published to further the interests of, or is directed to, or has a circulation restricted in whole or in part to any particular sect, denomination, labor or fraternal organization or other special group or class or citizens.

For purposes of this paragraph, a periodical designed primarily for free circulation or circulation at nominal rates shall not be considered to be a newspaper unless such periodical has made an application for such status to the Tax Commission in the manner prescribed by the commission and has provided to the Tax Commission documentation satisfactory to the commission showing that such periodical meets the requirements of the definition of the term "newspaper." However, if such periodical has been determined to be a newspaper under action taken by the State Tax Commission on or before April 11, 1996, such periodical shall be considered to be a newspaper without the necessity of applying for such status. A determination by the State Tax Commission that a publication is a newspaper shall be limited to the application of this chapter and shall not establish that the publication is a newspaper for any other purpose.

(m) "Communications service" means the provision, transmission, conveyance or routing, for a consideration, of voice, data, video or any other information or signals of the purchaser's choosing to a point, or between or among points, specified by the purchaser, by or through any electronic, radio or similar medium or method now in existence or hereafter devised. The term "communications service" shall include, but not be limited to, local telephone services, toll telephone services, telegraph services, teletypewriter services, teleconferencing services, private line services, channel services and mobile communications services. The term "communications service" shall not include cable television service and shall not include information and data services, including the storage of data or information for subsequent retrieval, the retrieval of data or information, or the processing, or reception and processing, of data or information intended to change its form or content.

(n) "Interstate communications service" means any communications service which either originates in this state or terminates in this state but does not both originate and terminate in this state.

(o) "Local telephone service" means the access to a local telephone system and the privilege of communications within a local calling area.

(p) "Toll telephone service" means: (i) communications for which there is a toll charge that varies in amount according to the distance and/or elapsed transmission time of the communication; or (ii) a service that entitles the subscriber or user, upon the payment of a periodic charge, to the privilege of an unlimited number of communications to or from a location outside of a local calling area.

The term "toll telephone service" includes, but is not limited to, wide-area telephone services.

(q) "Mobile communications service" means any one-way or two-way radio communications service carried on between mobile stations or receivers and land stations, and by mobile stations communicating among themselves, and shall include, but not be limited to, cellular communications services, personal communications services, paging services, specialized mobile radio services and any other form of mobile one-way or two-way communications service.

(r) "Prepaid telephone calling arrangement" means any right to exclusively purchase telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number and/or authorization code, whether manually or electronically dialed.

(s) "Service address" means the location of the communications equipment from which communications services are originated or at which communications services are received by the customer. In the event that this is not a defined location, as in the case of mobile phones, paging systems, maritime systems, air-to-ground systems and the like, "service address" shall mean the location of the customer's primary use of the communications equipment, as determined by the customer's residence address or business address, whichever more accurately reflects the jurisdiction in which the customer typically uses the mobile communications service; provided, however, that such address shall be in a state that includes the service area of the mobile communications service provider.

SECTION 9. Section 27-65-19, Mississippi Code of 1972, is amended as follows:

27-65-19. (1) (a) Except as otherwise provided in this subsection, upon every person selling to consumers, electricity, current, power, potable water, steam, coal, natural gas, liquefied petroleum gas or other fuel, there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the gross income of the business. Provided, gross income from sales to consumers of electricity, current, power, natural gas, liquefied petroleum gas or other fuel for residential heating, lighting or other residential noncommercial or nonagricultural use, and sales of potable water for residential, noncommercial or nonagricultural use shall be excluded from taxable gross income of the business. Provided further, upon every such seller using electricity, current, power, potable water, steam, coal, natural gas, liquefied petroleum gas or other fuel for nonindustrial purposes, there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the cost or value of the product or service used.

(b) There is hereby levied, assessed and shall be collected a tax equal to one and one-half percent (1-1/2%) of the gross income of the business when the electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel is sold to or used by a manufacturer, custom processor or public service company for industrial purposes, which shall include that used to generate electricity, to operate an electrical distribution or transmission system, to operate pipeline compressor or pumping stations or to operate railroad locomotives; provided, however, that:

(i) From and after July 1, 2000, through June 30, 2001, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be taxed at the rate of one and one-eighth percent (1.125%);

(ii) From and after July 1, 2001, through June 30, 2002, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be taxed at the rate of three-fourths of one percent (0.75%);

(iii) From and after July 1, 2002, through June 30, 2003, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be taxed at the rate of three-eighths of one percent (0.375%);

(iv) From and after July 1, 2003, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be exempt from sales tax as provided in Section 27-65-107.

(c) The one and one-half percent (1-1/2%) industrial rate provided for in this subsection shall also apply when the electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel is sold to a producer or processor for use directly in the production of poultry or poultry products, the production of livestock and livestock products, the production of plants or food by commercial horticulturists, the processing of milk and milk products, the processing of poultry and livestock feed, and the irrigation of farm crops.

(d) The one and one-half percent (1-1/2%) rate provided for in this subsection shall not apply to sales of fuel for automobiles, trucks, truck-tractors, buses, farm tractors or airplanes.

(e) (i) Except as otherwise provided in this subsection, upon every person engaged in the business of providing communications services there is hereby levied, assessed and shall be collected, a tax equal to seven percent (7%) of the amounts paid for the retail purchase of such communications services which either originate or terminate in this state and which are charged to a service address in this state, regardless of where such amounts are billed or paid. However, the transfer for a consideration of prepaid telephone calling arrangements and the recharge of prepaid telephone calling arrangements shall be taxable at the point of sale and not at the point of usage. If the sale or recharge of a prepaid telephone calling arrangement does not take place at the vendor's place of business, the sale or recharge shall be conclusively determined to take place at the customer's shipping address, or if there is no item shipped, at the customer's billing address or the location associated with the customer's mobile telephone number.

(ii) Amounts paid for the retail purchase of communications service shall include amounts paid for, or attributable to, the connection, movement, change or termination of a communications service, but shall not include amounts paid for or attributable to:

(A) Communications services which are resold, used as a component part of, or integrated into a communications service, including, but not limited to, carrier access charges, right of access charges, interconnection charges paid by the providers of mobile communications services or other communications services, charges for the sale of unbundled network elements, and any other intercompany charges for the use of facilities for providing communications services.

(B) Any excise tax, sales tax, or similar tax, fee or assessment levied by the United States or any state or local government, including, but not limited to, emergency telephone surcharges, upon the purchase, sale, use or consumption of any communications service, which is permitted or required to be added to the purchase price of such service.

(C) Services which are ancillary to the provision of communications service but are not directly related to the transmission of voice, data or information, including, but not limited to, detailed billing services, bad check charges and late payment charges.

(D) Communications services which have been obtained through fraudulent means or reimbursements between communications service providers intended to cover the cost of fraudulent communications activity.

(iii) To prevent actual multistate taxation of a communications service subject to taxation under this section, any taxpayer, upon proof that such taxpayer has paid a state or local tax in another state on such service, shall be allowed a credit against the tax imposed by this section to the extent of the amount of such tax paid in such other state.

(2) Persons making sales to consumers of electricity, current, power, natural gas, liquefied petroleum gas or other fuel for residential heating, lighting or other residential noncommercial or nonagricultural use or sales of potable water for residential, noncommercial or nonagricultural use shall indicate on each statement rendered to customers that such charges are exempt from sales taxes.

(3) There is hereby levied, assessed and shall be paid on transportation charges on shipments moving between points within this state when paid directly by the consumer, a tax equal to the rate applicable to the sale of the property being transported. Such tax shall be reported and paid directly to the State Tax Commission by the consumer.

SECTION 10. Section 27-65-75, Mississippi Code of 1972, is amended as follows:

[Until July 1, 2002, this section reads as follows:]

27-65-75. On or before the fifteenth day of each month, the revenue collected under the provisions of this chapter during the preceding month shall be paid and distributed as follows:

(1) On or before August 15, 1992, and each succeeding month thereafter through July 15, 1993, eighteen percent (18%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to such municipality and paid to such municipal corporation. On or before August 15, 1993, and each succeeding month thereafter, eighteen and one-half percent (18-1/2%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to such municipality and paid to such municipal corporation.

A municipal corporation, for the purpose of distributing the tax under this subsection, shall mean and include all incorporated cities, towns and villages.

Monies allocated for distribution and credited to a municipal corporation under this subsection may be pledged as security for any loan received by the municipal corporation for the purpose of capital improvements as authorized under Section 57-1-303, or loans as authorized under Section 57-44-7, or water systems improvements as authorized under Section 41-3-16.

In any county having a county seat which is not an incorporated municipality, the distribution provided hereunder shall be made as though the county seat was an incorporated municipality; however, the distribution to such municipality shall be paid to the county treasury wherein the municipality is located and such funds shall be used for road, bridge and street construction or maintenance therein.

(2) On or before September 15, 1987, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month One Million One Hundred Twenty-five Thousand Dollars ($1,125,000.00) shall be allocated for distribution to municipal corporations as defined under subsection (1) of this section in the proportion that the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each such municipality during the preceding fiscal year bears to the total gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in municipalities statewide during the preceding fiscal year. The State Tax Commission shall require all distributors of gasoline and diesel fuel to report to the commission monthly the total number of gallons of gasoline and diesel fuel sold by them to consumers and retailers in each municipality during the preceding month. The State Tax Commission shall have the authority to promulgate such rules and regulations as is necessary to determine the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each municipality. In determining the percentage allocation of funds under this subsection for the fiscal year beginning July 1, 1987, and ending June 30, 1988, the State Tax Commission may consider gallons of gasoline and diesel fuel sold for a period of less than one (1) fiscal year. For the purposes of this subsection, the term "fiscal year" means the fiscal year beginning July 1 of a year.

(3) On or before September 15, 1987, and on or before the fifteenth day of each succeeding month, until the date specified in Section 65-39-35, the proceeds derived from contractors' taxes levied under Section 27-65-21 on contracts for the construction or reconstruction of highways designated under the Four-Lane Highway Program created under Section 65-3-97 shall be deposited into the State Treasury to the credit of the State Highway Fund to be used to fund such Four-Lane Highway Program. The Mississippi Department of Transportation shall provide to the State Tax Commission such information as is necessary to determine the amount of proceeds to be distributed under this subsection.

(4) On or before August 15, 1994, and on or before the fifteenth day of each succeeding month, from the proceeds of gasoline, diesel fuel or kerosene taxes as provided in Section 27-5-101(a)(ii)1, Four Million Dollars ($4,000,000.00) shall be deposited in the State Treasury to the credit of a special fund designated as the "State Aid Road Fund," created by Section 65-9-17. Such funds shall be pledged to pay the principal of and interest on state aid road bonds heretofore issued under Sections 19-9-51 through 19-9-77, in lieu of and in substitution for the funds heretofore allocated to counties under this section. Such funds may not be pledged for the payment of any state aid road bonds issued after April 1, 1981; however, this prohibition against the pledging of any such funds for the payment of bonds shall not apply to any bonds for which intent to issue such bonds has been published, for the first time, as provided by law prior to March 29, 1981. From the amount of taxes paid into the special fund pursuant to this subsection and subsection (9) of this section, there shall be first deducted and paid the amount necessary to pay the expenses of the Office of State Aid Road Construction, as authorized by the Legislature for all other general and special fund agencies. The remainder of the fund shall be allocated monthly to the several counties in accordance with the following formula:

(a) One-third (1/3) shall be allocated to all counties in equal shares;

(b) One-third (1/3) shall be allocated to counties based on the proportion that the total number of rural road miles in a county bears to the total number of rural road miles in all counties of the state; and

(c) One-third (1/3) shall be allocated to counties based on the proportion that the rural population of the county bears to the total rural population in all counties of the state, according to the latest federal decennial census.

For the purposes of this subsection, the term "gasoline, diesel fuel or kerosene taxes" means such taxes as defined in paragraph (f) of Section 27-5-101.

The amount of funds allocated to any county under this subsection for any fiscal year after fiscal year 1994 shall not be less than the amount allocated to such county for fiscal year 1994. Monies allocated to a county from the State Aid Road Fund for fiscal year 1995 or any fiscal year thereafter that exceed the amount of funds allocated to that county from the State Aid Road Fund for fiscal year 1994, first must be expended by the county for replacement or rehabilitation of bridges on the state aid road system that have a sufficiency rating of less than twenty-five (25), according to National Bridge Inspection standards before such monies may be approved for expenditure by the State Aid Road Engineer on other projects that qualify for the use of state aid road funds.

Any reference in the general laws of this state or the Mississippi Code of 1972 to Section 27-5-105 shall mean and be construed to refer and apply to subsection (4) of Section 27-65-75.

(5) One Million Six Hundred Sixty-six Thousand Six Hundred Sixty-six Dollars ($1,666,666.00) each month shall be paid into the special fund known as the "State Public School Building Fund" created and existing under the provisions of Sections 37-47-1 through 37-47-67. Such payments into said fund are to be made on the last day of each succeeding month hereafter.

(6) An amount each month beginning August 15, 1983, through November 15, 1986, as specified in Section 6 of Chapter 542, Laws of 1983, shall be paid into the special fund known as the Correctional Facilities Construction Fund created in Section 6 of Chapter 542, Laws of 1983.

(8) On or before August 15, 1992, and each succeeding month thereafter, nine and seventy-three one-thousandths percent (9.073%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2) shall be deposited into the Education Enhancement Fund created pursuant to Section 37-61-33.

(9) On or before August 15, 1994, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month, Two Hundred Fifty Thousand Dollars ($250,000.00) shall be paid into the State Aid Road Fund.

(10) On or before August 15, 1994, and each succeeding month thereafter through August 15, 1995, from the revenue collected under this chapter during the preceding month, Two Million Dollars ($2,000,000.00) shall be deposited into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(11) Notwithstanding any other provision of this section to the contrary, on or before February 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(2) and the corresponding levy in Section 27-65-23 on the rental or lease of private carriers of passengers and light carriers of property as defined in Section 27-51-101 shall be deposited, without diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(12) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(1) on retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101 and the corresponding levy in Section 27-65-23 on the rental or lease of these vehicles, shall be deposited, after diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(13) On or before July 15, 1994, and on or before the fifteenth day of each succeeding month thereafter, that portion of the avails of the tax imposed in Section 27-65-22, which is derived from activities held on the Mississippi state fairgrounds complex, shall be paid into a special fund hereby created in the State Treasury and shall be expended pursuant to legislative appropriations solely to defray the costs of repairs and renovation at such Trade Mart and Coliseum.

(14) On or before August 15, 1998, and each succeeding month thereafter through July 15, 2005, that portion of the avails of the tax imposed in Section 27-65-23 which is derived from sales by cotton compresses or cotton warehouses and which would otherwise be paid into the General Fund, shall be deposited in an amount not to exceed Two Million Dollars ($2,000,000.00) into the special fund created pursuant to Section 69-37-39.

(15) The remainder of the amounts collected under the provisions of this chapter shall be paid into the State Treasury to the credit of the General Fund.

(16) It shall be the duty of the municipal officials of any municipality which expands its limits, or of any community which incorporates as a municipality, to notify the commissioner of such action thirty (30) days before the effective date. Failure to so notify the commissioner shall cause such municipality to forfeit the revenue which it would have been entitled to receive during this period of time when the commissioner had no knowledge of the action. If any funds have been erroneously disbursed to any municipality or any overpayment of tax is recovered by the taxpayer, the commissioner may make correction and adjust the error or overpayment with such municipality by withholding the necessary funds from any subsequent payment to be made to the municipality.

(17) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1999, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-19(e) with respect to interstate communications services, shall be deposited, without diversion, into the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund established in Section 4 of House Bill No. , 1999 Regular Session.

[From and after July 1, 2002, this section reads as follows:]

27-65-75. On or before the fifteenth day of each month, the revenue collected under the provisions of this chapter during the preceding month shall be paid and distributed as follows:

A municipal corporation, for the purpose of distributing the tax under this subsection, shall mean and include all incorporated cities, towns and villages.

(4) On or before August 15, 1994, and on or before the fifteenth day of each succeeding month from the proceeds of gasoline, diesel fuel or kerosene taxes as provided in Section 27-5-101(a)(ii)1, Four Million Dollars ($4,000,000.00) shall be deposited in the State Treasury to the credit of a special fund designated as the "State Aid Road Fund," created by Section 65-9-17. Such funds shall be pledged to pay the principal of and interest on state aid road bonds heretofore issued under Sections 19-9-51 through 19-9-77, in lieu of and in substitution for the funds heretofore allocated to counties under this section. Such funds may not be pledged for the payment of any state aid road bonds issued after April 1, 1981; however, this prohibition against the pledging of any such funds for the payment of bonds shall not apply to any bonds for which intent to issue such bonds has been published, for the first time, as provided by law prior to March 29, 1981. From the amount of taxes paid into the special fund pursuant to this subsection and subsection (9) of this section, there shall be first deducted and paid the amount necessary to pay the expenses of the Office of State Aid Road Construction, as authorized by the Legislature for all other general and special fund agencies. The remainder of the fund shall be allocated monthly to the several counties in accordance with the following formula:

(a) One-third (1/3) shall be allocated to all counties in equal shares;

For the purposes of this subsection, the term "gasoline, diesel fuel or kerosene taxes" means such taxes as defined in paragraph (f) of Section 27-5-101.

Any reference in the general laws of this state or the Mississippi Code of 1972 to Section 27-5-105 shall mean and be construed to refer and apply to subsection (4) of Section 27-65-75.

(7) On or before August 15, 1992, and each succeeding month thereafter, two and two hundred sixty-six one-thousandths percent (2.266%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2), not to exceed the fiscal year 1997 appropriated level shall be deposited by the commission into the School Ad Valorem Tax Reduction Fund created pursuant to Section 37-61-35, with the balance to be transferred to the Education Enhancement Fund created under Section 37-61-33 for appropriation by the Legislature as other education needs and not subject to the percentage set asides set forth in Section 37-61-33.

(12) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(1) on retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101, shall be deposited, after diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(15) The remainder of the amounts collected under the provisions of this chapter shall be paid into the State Treasury to the credit of the General Fund.

SECTION 11. Section 27-35-319, Mississippi Code of 1972, is amended as follows:

27-35-319. * * * Notwithstanding the provisions of Sections 27-35-31, 27-35-309, 27-35-317 and 27-35-323, when all the property of a telephone company is located in not more than six (6) counties, it shall be assessed and taxed as that of a person; and the laws, providing for the assessment and collection of taxes on the property of persons, shall apply to the assessment and collection of taxes on the property of such companies. All shares or certificates of stock issued by any such corporation or company shall be exempt from taxation and shall not be returned for assessment. Its land and tangible personal property shall be assessed and taxed where situated on the first day of January of the year.

* * *

SECTION 12. Sections 21-33-201, 21-33-203, 21-33-205, 21-33-207, 21-33-209 and 21-33-211, Mississippi Code of 1972, which constitute the City Utility Tax Law, are hereby repealed.

SECTION 13. Sections 8 and 9 of this act shall be effective with respect to taxable services reflected on bills submitted by communications service providers to their customers which are dated on or after July 1, 1999, regardless of when such services are provided. Section 12 of this act shall take effect on January 1, 2000. The remaining provisions of this act shall take effect and be in force from and after July 1, 1999.