House Bill 1564

AN ACT TO AUTHORIZE THE GOVERNING AUTHORITIES OF ANY MUNICIPALITY TO IMPOSE A SPECIAL TAX NOT TO EXCEED THREE PERCENT ON THE GROSS PROCEEDS OF ALL SALES OR GROSS INCOME ON BUSINESSES IN THE MUNICIPALITY DERIVED FROM ACTIVITIES TAXED AT THE RATE OF SEVEN PERCENT OR MORE UNDER THE MISSISSIPPI SALES TAX LAW; TO PROVIDE THAT THE SPECIAL SALES TAX SHALL NOT BE LEVIED UNLESS AUTHORIZED BY AT LEAST THREE-FIFTHS OF THE VOTES CAST AT A REFERENDUM CALLED AND HELD FOR SUCH PURPOSE; TO PROVIDE THAT A MUNICIPALITY LEVYING A SPECIAL TAX UNDER THIS ACT MUST USE FIFTY PERCENT OF THE PROCEEDS FROM THE TAX TO PROPORTIONATELY DECREASE THE AD VALOREM TAX LEVIES OF THE MUNICIPALITY; TO AUTHORIZE THE BOARD OF SUPERVISORS OF ANY COUNTY TO IMPOSE A SPECIAL TAX NOT TO EXCEED THREE PERCENT ON THE GROSS PROCEEDS OF ALL SALES OR GROSS INCOME ON BUSINESSES IN THE COUNTY OUTSIDE THE CORPORATE BOUNDARIES OF ANY MUNICIPALITY WITHIN SUCH COUNTY DERIVED FROM ACTIVITIES TAXED AT THE RATE OF SEVEN PERCENT OR MORE UNDER THE MISSISSIPPI SALES TAX LAW; TO PROVIDE THAT THE SPECIAL SALES TAX SHALL NOT BE LEVIED UNLESS AUTHORIZED BY AT LEAST THREE-FIFTHS OF THE VOTES CAST AT A REFERENDUM CALLED AND HELD FOR SUCH PURPOSE; TO PROVIDE THAT A COUNTY LEVYING A SPECIAL TAX UNDER THIS ACT MUST USE FIFTY PERCENT OF THE PROCEEDS FROM THE TAX TO PROPORTIONATELY DECREASE THE AD VALOREM TAX LEVIES OF THE COUNTY; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) Subject to the provisions of this section, the governing authorities of any 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 three percent (3%) of the gross proceeds of sales or gross income of the business, as the case may be, derived from any of the activities taxed at the rate of seven percent (7%) or more under the Mississippi Sales Tax Law, Section 27-65-1 et seq. The tax levied under this section shall apply to every person making sales, delivery or installations of tangible personal property or services within any municipality which has adopted the levy authorized in this section but shall not apply to sales exempted by Sections 27-65-19, 27-65-101, 27-65-103, 27-65-105, 27-65-107, 27-65-109 and 27-65-111 of the Mississippi Sales Tax Law.

(2) 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 and calling for a referendum to be held on the question. The date of the referendum shall be set in the resolution. Notice of the referendum 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 referendum and the last publication to be made not more than seven (7) days before the referendum. At the referendum, all qualified electors of the municipality may vote. The ballots used at the referendum 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 referendum have been canvassed by the election commissioners of the municipality and certified by them to the governing authorities, it shall be the duty of the governing authorities to determine and adjudicate whether at least three-fifths (3/5) of the qualified electors who voted in the referendum voted in favor of the tax. If at least three-fifths (3/5) of the qualified electors who voted in the referendum 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 referendum, shall be furnished to the Department of Revenue not less than thirty (30) days before the effective date of the levy.

(3) (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 in which collected. The Department of Revenue may retain three percent (3%) of the proceeds of the 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.

(b) The proceeds of the special sales tax shall be placed into a separate fund apart from the municipal general fund and any other funds of the municipality. Fifty percent (50%) of the proceeds of the special sales tax shall be used and expended by the municipality to proportionately decrease the ad valorem tax levies of the municipality and the remainder of the proceeds may be used and expended by the municipality for any purposes for which the municipality is authorized by law to use and expend funds.

(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 the municipality in which such damages, penalties or interest were collected on the same basis and in the same manner as the tax proceeds. Any overpayment of tax for any reason that has been disbursed to any municipality or any payment of the tax to any municipality in error may be adjusted by the Department of Revenue on any subsequent payment to the municipality involved 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. (d) If a municipality imposing a special sales tax under this section 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 a referendum conducted, as far as is practicable, in the manner provided in subsection (2) of this section, except that only qualified electors in the annexed area may vote in the referendum. However, if a municipality imposing a special sales tax under this section expands its corporate boundaries into a county that is imposing a special sales tax under Section 2 of this act, the governing authorities of the municipality may not impose the special sales tax in the annexed area for as long as such county is imposing a special sales tax under Section 2 of this act.

(e) If a municipality imposing a special sales tax under this section contracts its corporate boundaries, the special sales tax shall continue to be imposed in the area that was in the corporate boundaries of the municipality before the contraction of such boundaries.

SECTION 2. (1) Subject to the provisions of this section, the board of supervisors of any county may impose upon all persons as a privilege for engaging or continuing in business or doing business within such county but outside the corporate boundaries of any municipality within such county, a special sales tax at the rate of not more than three percent (3%) of the gross proceeds of sales or gross income of the business, as the case may be, derived from any of the activities taxed at the rate of seven percent (7%) or more under the Mississippi Sales Tax Law, Section 27-65-1 et seq. The tax levied under this section shall apply to every person making sales, delivery or installations of tangible personal property or services within any county which has adopted the levy authorized in this section but shall not apply to sales exempted by Sections 27-65-19, 27-65-101, 27-65-103, 27-65-105, 27-65-107, 27-65-109 and 27-65-111 of the Mississippi Sales Tax Law.

(2) Before any tax authorized under this section may be imposed, the board of supervisors of the county 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 a referendum to be held on the question. The date of the referendum shall be set in the resolution. Notice of the referendum shall be published once each week for at least three (3) consecutive weeks in a newspaper published or having a general circulation in the county, 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 referendum and the last publication to be made not more than seven (7) days before the referendum. At the referendum, all qualified electors of the county may vote. The ballots used at the referendum 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 referendum have been canvassed by the election commissioners of the county and certified by them to the board of supervisors, it shall be the duty of the board of supervisors to determine and adjudicate whether at least three-fifths (3/5) of the qualified electors who voted in the referendum voted in favor of the tax. If at least three-fifths (3/5) of the qualified electors who voted in the referendum voted in favor of the tax, the board of supervisors 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 referendum, shall be furnished to the Department of Revenue not less than thirty (30) days before the effective date of the levy.

(3) (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 county and shall be paid to the county in which collected. The Department of Revenue may retain three percent (3%) of the proceeds of the tax for the purpose of defraying the costs incurred by the department in the collection of the tax. Payments to the county 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 separate fund apart from the county general fund and any other funds of the county. Fifty percent (50%) of the proceeds of the special sales tax shall be used and expended by the county to proportionately decrease the ad valorem tax levies of the county and the remainder of the proceeds may be used and expended by the county for any purposes for which the county is authorized by law to use and expend funds.

(d) If the board of supervisors of a county imposes a special sales tax under this section and a municipality annexes a part of the county, the special sales tax shall continue to be imposed in the annexed area until the board of supervisors discontinues the tax.

(e) If the board of supervisors of a county imposes a special sales tax under this section, and a municipality within the county that is not imposing a special sales tax under Section 1 of this act contracts its municipal corporate boundaries, the board of supervisors of the county may not impose a special sales tax in the de-annexed area unless the tax is approved at a referendum conducted, as far as is practicable, in the manner provided in subsection (2) of this section, except that only qualified electors in the de-annexed area may vote in such referendum.

SECTION 3. This act shall take effect and be in force from and after July 1, 2020.