Jay Hughes: Internet Sales Tax and Cheating Your Hometown

With a looming special session and all the rush to be “for” or “against” an internet sales tax, it’s important to understand what it really is and how the state legislature is about to rob your local cities to try to hide what they have failed to do in recent years for roads and bridges, and many other things that might risk precious reelection for many of them. Few people realize that Mississippi has always had a sales tax on anything we buy from out of state. The burden has simply been on the buyer to voluntarily report and pay it. The U. S. Supreme Court has now changed that so states can make the seller collect the tax and send it to the state.
How is sales tax revenue important to your local community? When you buy things at the local grocery store or hardware center, they collect sales tax and then send it to the state Department of Revenue. Once the tax dollars get there, they use a fancy little computer and send 18.5 cents of every 100 cents right back to the city that collected it. This is what your local government uses to pay for things such as police and fire protection, roads, sewer, garbage, libraries, animal shelters, jails, etc. It also helps keep your local property taxes from increasing.
When people started buying more items online a few years ago, those sales taxes weren’t collected by your city, meaning less money went to operate your local government and basic services got shortchanged. With the new court ruling, somewhere between $100 – $200 Million will be coming into Mississippi from internet sellers. The problem is that the state leaders claim it is just too darned complicated for their fancy computers to figure out where those purchases came from in Mississippi, so they will just keep it in the General Fund (pronounced “Lawmaker Begging Fund”).
If the state decides to just keep all the internet sales taxes, it will mean that the 18.5% won’t get back to your town and the legislature won’t be sending the required portion to the classroom supply fund either. So, despite the loud political cries of wanting more money going into the classrooms, even less will go there if the new revenue jumps right into the General Fund. This means that 18.5 of every 100 cents of internet sales taxes people pay will go to the state and not to their local towns. Sadly, instead of benefiting our communities, these internet sales tax dollars will simply plug holes in the state budget so career politicians can pretend everything is just fine.
The spin you will hear is how complicated it is to try to figure out where the online purchases came from, so they must just keep it. To that I say hogwash! If Amazon’s computers can figure out how to get a whoopie cushion to my front door overnight, the state can surely figure out where that sales tax came from. If you feel the same way, you better make sure your state representative and senator know how you feel before they get to Jackson for the Special Session and get handed a blank check on your account.

By Rep. Jay Hughes
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