Legislature voted so as to add two new native tourism taxes throughout its session

Mississippi legislature approves several each year Tourism taxes for municipalities and counties that are levied on restaurants, hotels or both.

These taxes are intended to be spent on parks, recreation and tourism projects in the city in which they are levied, in addition to the 7 percent state sales tax.

New taxes

Here are the two tourism taxes that the legislature passed at this session:

House bill 1465 would allow the city of Mize to impose a 2 percent tax on restaurants, which, if approved by voters, would be repealed in 2025. The bill is due April 16 from Governor Tate Reeves.

HB 1504 would allow the City of Forest to impose a 2 percent tax on hotels and restaurants. If the voters approve, the tax would be lifted in 2025. The bill is due by the governor on April 19th.

Reauthorized taxes

HB 1529 would allow the city of Como to re-approve their $ 1 per hotel stay and 2 percent restaurant tax. The tax will remain in force until 2025 and has already been legally signed by the governor.

In 2018, the revenue from these local tourism taxes amounted to more than $ 98 million. As of fiscal 2020, which ended June 30, revenue from these taxes was more than $ 106 million, an increase of 8.16 percent.

There are 92 of these taxes on the books, 75 for parishes, and 17 of the 82 counties in the state have any of these taxes.

Tourism taxes start as a local bill in the legislation. These bills usually go to a city or county in a legislature’s district and are one of the last tasks the legislature does before leaving the city at the end of the session.

Once local law is passed, a local voter referendum is required before the tax can take effect. Tourism taxes usually expire three or four years from the transition.

The same rules that regulate the forwarding of general invoices and appropriation invoices apply to local invoices. A three-fifths majority of both chambers will have to pass a new tax that will be levied as a temporary tax by local leaders.

However, they are often re-authorized by a new bill if they expire after three years without input from local voters.

Sometimes the tax expires without re-approval and companies continue to levy the tax. In the past five years, the legislature has approved the taxes four times and allowed cities to retrospectively collect income from an expired tax.