Internet Sales, Annexation May Contribute to Tax Raise in City of Oxford

By Alyssa Schnugg
Staff writer
alyssa.schnugg@hottytoddy.com

An increase of people shopping online and future annexation are contributing to Oxford officials considering raising the local ad valorem tax by 2 mills, according to Oxford Mayor Robyn Tannehill.

A public meeting will be held at 5 p.m. on Sept. 4, in the Courtroom of the Oxford City Hall during the board’s regular meeting for citizens to learn more about the proposed tax increase and voice concerns or ask questions.

For the next fiscal year, the city of Oxford plans to increase the ad valorem tax millage rate by 2 mills from 30.22 mills to 32.22 mills. This increase means that city residents will pay more in ad valorem taxes on their homes, automobile tags, utilities, business fixtures and equipment and rental property.

Oxford Mayor Robyn Tannehill.

Before the Oxford Board of Aldermen can approve a tax increase, the board must notify the public and hold a public hearing.

The mayor and board have been meeting all month with department heads to finalize the fiscal year 2018-2019 budget.

Tannehill said several factors have caused the board to consider a tax hike.

“Our sales tax is down this year,” she said Monday. “For the past 10 years, we have seen a sales tax increase of 5-9 percent each year. Last year we saw a 9-percent increase. This year we are down 1 percent.”

Tannehill said she and the board contribute the decrease to online shopping.

On June 21, the United States Supreme Court overturned a decision that required businesses to have a physical presence in the state to be required to collect taxes. This opened the door for Mississippi’s Legislature to pass a law that levels the playing field by requiring remote vendors without a physical presence to collect taxes.

Regular 7 percent state sales taxes paid in Oxford go to Jackson, and then 18.5 percent of those taxes are returned to Oxford. The city of Oxford and other cities around the state have requested the online sales taxes be distributed the same way.

The Legislature is meeting this week in a special session to determine how the online sales tax dollars will be diverted to communities. The most recent discussions have the funds being phased in over a four-year period.

“Although we will be thankful to receive the funds in any form, those are funds we have been used to receiving directly and utilizing in our general fund,” Tannehill said.
Growth is another contributing factor, Tannehill said.

On Monday, city attorneys presented evidence during an annexation hearing in the Lafayette County Chancery Court to show why Oxford should be allowed to annex 12 miles of county land into the city limits. The judge will rule on the annexation at a later date. However, should the judge approve the annexation, the city will not receive taxes from the annexed properties until the fiscal year 2019-2020. The city’s fiscal year runs from Oct. 1 to Sept. 30.

“Our building permit revenue is down almost $400,000 this year,” Tannehill added. “We are a tax base of approximately 22,000 servicing 40,000 to 60,000 on a regular day and anywhere from 80,000 to 100,000 on any given weekend. It is difficult to make those numbers work.”