Senate Bill 3024

AN ACT TO AUTHORIZE THE GOVERNING AUTHORITIES OF THE CITY OF HOLLY SPRINGS, MISSISSIPPI, TO IMPOSE A SPECIAL SALES TAX OF NOT MORE THAN 1% ON THE GROSS PROCEEDS OF ALL SALES OR THE GROSS INCOME OF BUSINESSES IN THE MUNICIPALITY DERIVED FROM ACTIVITIES TAXED AT THE RATE OF 7% OR MORE UNDER THE MISSISSIPPI SALES TAX LAW; TO PROVIDE CERTAIN EXEMPTIONS FROM THE SPECIAL SALES TAX AUTHORIZED BY THIS ACT; TO PROVIDE THAT THE SPECIAL SALES TAX SHALL NOT BE LEVIED UNLESS AUTHORIZED BY AT LEAST 3/5 OF THE VOTES CAST AT AN ELECTION CALLED AND HELD FOR SUCH PURPOSE; TO PROVIDE THE PURPOSES FOR WHICH THE REVENUE COLLECTED FROM THE SPECIAL SALES TAX MAY BE USED AND EXPENDED; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) As used in this section "governing authorities" means the governing authorities of the City of Holly Springs, Mississippi.

(2) (a) Subject to the provisions of this section, the governing authorities may impose upon all persons as a privilege for engaging or continuing in business or doing business within the City of Holly Springs, Mississippi, 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., Mississippi Code of 1972.

(b) The tax levied under this section shall apply to every person making sales, delivery or installations 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 upon which a tax is levied pursuant to Chapter 945, Local and Private Laws of 1998;

(iii) Gross proceeds of sales or gross income of hotels and motels upon which a tax is levied pursuant to Chapter 945, Local and Private Laws of 1998; and

(iv) Retail sales of food for human consumption not purchased with food stamps issued by the United States Department of Agriculture, or other federal agency, but which would be exempt under Section 27-65-111(o), Mississippi Code of 1972, from the taxes imposed by this chapter if the food items were purchased with food stamps.

(3) Before any tax authorized under this section may be imposed, the governing authorities 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 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 City of Holly Springs, 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 City of Holly Springs 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 (ü) opposite his choice on the proposition. When the results of the election have been canvassed by the election commissioners of the City of Holly Springs 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.

(4) The revenue collected pursuant to the tax levy imposed under this section may be expended to fund redevelopment projects an Eight Million Dollar ($8,000,000.00) capital improvement projects plan adopted by the governing authorities. The capital improvement projects shall include, but are not limited to, improvements to fire protection and emergency capabilities with the purchase of a new pumper, emergency sirens and construction of a second fire station to improve firefighting efforts; repair of the public works building and equipment to operate the public works department; renovation of the city hall; improvements in parks and recreation; neighborhood and community development initiatives to improve and enhance the neighborhoods; drainage improvements throughout flood plain areas of the city; and the retirement of current related facilities and equipment debt.

(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 three percent (3%) 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 City of Holly Springs 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.

(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 City of Holly Springs, and shall be expended by the City of Holly Springs 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 audited annually by an independent certified public accountant. 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) 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 Holly Springs 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 the city or any payment of the tax to the city 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 the City of Holly Springs expands its corporate boundaries, the governing authorities 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) The governing authorities may issue bonds or otherwise incur indebtedness of the city in an aggregate principal amount that is not in excess of Eight Million Dollars ($8,000,000.00) or an amount for which debt service is capable of being funded by the proceeds of the special sales tax levied under this act, whichever is the lesser amount. The indebtedness authorized by this subsection shall not be considered when computing any limitation of indebtedness of the city established by law.

(8) This section shall stand repealed sixty (60) days after the city has received proceeds from the levy of the tax in the aggregate amount of Eight Million Dollars ($8,000,000.00).

SECTION 2. The governing authorities are directed to submit this act, immediately upon approval by the Governor, or upon approval by the Legislature subsequent to a veto, to the Attorney General of the United States or to the United States District Court for the District of Columbia in accordance with the provisions of the Voting Rights Act of 1965, as amended and extended.

SECTION 3. This act shall take effect and be in force from and after the date it is effectuated under Section 5 of the Voting Rights Act of 1965, as amended and extended.