Ok. I’m just going to go ahead and say it. Some of our state legislators don’t truly have the best interest of Mississippi businesses at heart.
Last week the Mississippi Senate Finance Committee killed a House bill that if passed would have instituted an internet sales tax and earmarked that money to fix the states eroding infrastructure. Lt. Governor Tate Reeves went on to say in a statement that “this bill is unconstitutional and any promised new revenue is simply fake money.”
He is referring to the 1992 U.S. Supreme Court decision Quill Corp. vs. North Dakota. Under that decision, retailers are required to have a physical presence in a state before it can levy sales taxes on them. This whole argument seems completely ludicrous, especially when you consider that the internet and internet shopping barely existed in 1992. Amazon, which is the company fueling this debate, wasn’t even founded until 1994. Also many other states have already imposed an internet sales tax.
There is a small amount of hope with Department of Revenue regulation with similar language that could be due in as little as two weeks. The proposed DOR rule require firms with $250,000 in annual sales to register with the DOR and charge Mississippi customers the state 7 percent sales tax. Right now, taxpayers are supposed to pay a 7 percent “consumer use tax” individually on all purchases from out of state firms.
Sites like Amazon.com are direct competition to local businesses that derive tax dollars to help fund our schools, roads, etc. It is vital that they compete on an even playing field and have to pay the same amount. As an example, if a local clothing store based in Kosciusko sells an item online, the purchaser still has to pay the 7 percent tax. However, they can get on a site like Amazon.com and buy the same item without the tax.
Actions like these are destroying the traditional locally-owned businesses and must be stopped.
Let’s think through in this proposed tax: In Feb. online sales giant Amazon agreed to start collecting a 7 percent tax on Mississippi sales and returning it to the state. Estimates stated that Amazon sales tax would derive between $15-$30 million a year.
The Supreme Court ruling that Mr. Reeves was referring to was in reference to mail-in orders. If that is the reasoning that our legislators are going to use, then something needs to change with the ruling. We are living in a different world today than we did in 1992. Amazon is already collecting the money, like every online distributor should.
In fiscal 2016, the state collected more than $3 billion in sales tax revenue while collecting more than $310 million in use tax, with only $250,000 of that coming from individual consumers.
This additional online sales tax revenue is money that Mississippi desperately needs. Our roads are crumbling and our school budgets are shrinking on a daily basis, so something needs to be done.
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Joseph Brown is the editor and publisher of The Star-Herald. He can be reached at jbrown@starherald.net.
