Mississippi Department Of Revenue Targets Rentals For Sales And Tourism Tax

The Mississippi Department of Revenue (DOR) is moving forward with a new ruling that Oxonians may be partially interested in. The DOR is working to reinterpret the tax laws for hotels and motels to now include condo, town home, and single family home rentals to become subject to the 7 percent sales tax.
The tax will impact those who own and rent condos for periods of time under 90 days. In Oxford, rentals take place on any given weekend for all kinds of events including football games, Double Decker, graduation and countless more.
In Oxford and other areas of Mississippi, a 2 percent tourism tax will also be in effect. Oxford rep. Jay Hughes said that the action taken by the DOR is a tax shift which will punish renters for revenue shortfalls. 
“We’ve cut $353 million out of our budget for corporations, but now they’re nickel and diming the little guy too by creating new taxes on individuals,” Hughes said. “[Renters] are going to be required to become tax collectors for the state. It’s going to add a whole new level of bureaucracy and taxing of individuals to cover revenue shortfalls.”

There will be a hearing for the potential change in 30 days, and if it passes as Hughes said there is “every indication” that it will, enforcement of the change would happen 30 days after the ruling. Hughes believes that the change in the language of the law by DOR is a way to avoid a public vote. 
“My biggest problem is not just that they’re doing it, it’s that they’re doing it through improper channels,” Hughes said. “If we were going to assess taxes like they’re doing right now, it should go through the legislature. It should be in public, vetted and transparent where legislators have to cast a vote for or against new taxes. They’re trying to do it in a way to raise taxes without being blamed for it.”
If the law is changed, renters would be required to create an account with DOR and create separate invoices to collect the 7 percent sales tax and 2 percent tourism tax, another for amenities provided, all to be done in a permitted amount of time. If the proper channels aren’t followed or the taxes aren’t remitted in a timely manner, Hughes warned that criminal charges are a possibility, and he is worried it will have a negative effect on the rental business in places like Oxford. 
“If you rent a room for football weekend, you have to charge this 9 percent tax and remit it to the state. I think it will reduce the amount of people renting their houses. They have to charge more or reduce it, and it will have a negative effect,” Hughes said. “When you really look at it, it’s taxing Mississippians.”

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Steven Gagliano is a writer for HottyToddy.com. He can be reached at steven.gagliano@hottytoddy.com. 
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