Gov. Phil Bryant speaks at the Mississippi Aquarium groundbreaking ceremony in Gulfport.
Gov. Phil Bryant speaks at the Mississippi Aquarium groundbreaking ceremony in Gulfport. Credit: Sereena Henderson / Mississippi Today

Gov. Phil Bryant says how the U.S. Supreme Court rules – likely later this summer – on whether states can mandate internet retailers to collect a use tax for them on the items the companies sell could be “a big factor” in whether he calls a special session to deal with ongoing transportation woes.

Multiple states are asking the nation’s high court to reverse a 1990s decision that has prevented states from requiring companies to collect the use tax on internet sales if the businesses do not have a “brick and mortar” presence in the state. Oral arguments were heard before the Supreme Court earlier this year and a ruling could come in July.

Bryant, a second term Republican, said the funds the state would receive from the internet sales, combined with revenue from a lottery and from sports betting “together are very close to the number we need to support our infrastructure.”

The Legislature would have to change the law to direct any funds collected from online retailers to infrastructure. Under current law, funds collected from internet sales would go to the general fund, primarily to support education and public health, but not for transportation.

And Bryant also cited the lottery as a potential source of funds for transportation or infrastructure needs. Six states, including Mississippi, do not have a lottery. The governor said that he believes there would be enough votes in the Legislature to pass a lottery in a special session.

And the third plank in the governor’s proposal is sports betting. The Supreme Court ruled recently that the federal government could not prevent the states from allowing bets on sporting events. Mississippi law, passed in advance of the expected Supreme Court ruling, already allows wagers on sporting events to be made in the state’s casinos along the Mississippi River and Gulf of Mexico.

Legislation would be needed to direct funds derived from sports betting to transportation needs.

The governor estimated that sports betting could produce $30 million annually in revenue for the state. But that number might seem high since the state would receive only 8 percent of the revenue the casinos derived from sports betting. Currently the state receives about $135 million annually from the 8 percent tax on the casinos’ profits from their other games.

Studies by the University Research Center have estimated the lottery would generate about $90 million annually in revenue for the state.

The Mississippi Department of Transportation has said it needs about $400 million annually in additional revenue to deal with transportation issues across the state. In addition, local governments are dealing with a lack of funds to deal with infrastructure needs. Those local transportation problems include the closure of more than 500 bridges for safety reasons.

It also is uncertain how much new revenue the state would receive from internet sales. Many online retailers, including the behemoth Amazon, already are collecting the 7 percent use tax levied on most retail items voluntarily for the state.

During a June 2017 to October 2017 period, the state collected $47.8 million from the voluntary collections.

And an earlier study by the University Research Center estimated that during 2016 the state would have collected between $105 million to $122 million from the internet sales if the retailers were required to collect the use tax.

In other words, many of the major online retailers already are collecting the tax based on a 2017 agreement with the Department of Revenue.

State leaders have been grappling with sources of revenue for transportation needs since the Legislature has refused to consider proposals to increase the tax on motor fuel to resolve the issue.

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.

Take our 2023 reader survey

Bobby Harrison, Mississippi Today’s senior capitol reporter, covers politics, government and the Mississippi State Legislature. He also writes a weekly news analysis which is co-published in newspapers statewide. A native of Laurel, Bobby joined our team June 2018 after working for the North Mississippi Daily Journal in Tupelo since 1984. He is president of the Mississippi Capitol Press Corps Association and works with the Mississippi State University Stennis Institute to organize press luncheons. Bobby has a bachelor's in American Studies from the University of Southern Mississippi and has received multiple awards from the Mississippi Press Association, including the Bill Minor Best Investigative/In-depth Reporting and Best Commentary Column.