Online sales tax for roads revived

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The House brought back parts of a bill Thursday that proposes to use sales taxes collected from online purchases to fund road improvements in Mississippi.

Gil Ford Photography

Rep. Trey Lamar, R-Senatobia

The original proposal gave local tax breaks for economic development projects totaling more than $60 million.

Most of that legislation was removed and replaced with the text of failed House Bill 480, which supporters said directed the state tax collectors to collect a user fee on out-of-state Internet businesses. That money could then be earmarked to fix roads and bridges in the state, supporters said.

The bill passed the House in February, but Lt. Gov. Tate Reeves killed it because he said that he believed the collections would be unconstitutional.

Rep. Trey Lamar, R-Senatobia, said that the state now collects approximately $60 million from taxpayers who pay the fees voluntarily. The revived bill would allocate that money for infrastructure fixes, with 50 percent going to the Mississippi Department of Transportation and the other half going to counties and municipalities.

Mississippi Today

House Speaker Philip Gunn, R-Clinton

“I’m proud of the House for once again stepping up to provide a solution to the needs of our roads and bridges in Mississippi,” House Speaker Philip Gunn, R-Clinton, said in a media statement after the bill passed 109-7. “The House has demonstrated it is serious about beginning to address the need this year.”

The bill also awards $50 million in bonds — $25 million to counties and $25 million to cities for bridge repairs.

In 1992, the U.S. Supreme Court ruled that states did not have the right to tax inter-state sales, including internet sales. If federal courts or Congress explicitly allow Internet sales, another $200 million could go towards infrastructure, Lamar said.

Most questions came from lawmakers wanting to make sure their districts would benefit.

“When it comes to the Delta, it seems like we always get the short of the stick. I want to make sure, for roads and bridges, that we are going to be taken serious,” said Rep. Rufus Straughter, D-Belzoni.

The Mississippi Economic Council, which has been leading a campaign for more roads and bridge repair funding, supports the House move. Scott Waller, the organization’s chief operating officer, said the some 215 bridges that are closed around the state cause 65,000 detours every day.

This year, some lawmakers have cited Mississippi’s budget woes and said local governments would have to be prepared to meet the state partway to fix roads and bridges.

Shari Veazey, executive director of the Mississippi Municipal League, said she would be open to meeting with lawmakers but said cities can’t afford to invest more.

“They already have a lot of skin in the game” Veazey said. “To put more skin in the game is to raise people’s property taxes. They don’t want to raise taxes in this building and we don’t want to raise taxes back at home.”

When the MEC press conference ended, Sen. Hob Bryan, D-Amory, a frequent critic of tax incentives, took to the podium. He said money that could have gone to infrastructure had instead gone to corporations over the years in the form of tax breaks.