It’s that time of year — income tax filing season, and the only ones happy about it are those receiving refunds or finding they don’t owe anything extra.
Struggling with a tax return can cause a person to momentarily forget the myriad of other taxes all of us pay, most notably the sales tax on most of the necessities we use every day, such as groceries.
One of those taxes that can sneak up on you is a hotel or motel tax.
Often billed as “tourism taxes” and sometimes also applying to prepared food, they are becoming more plentiful in Mississippi.
I’m pretty sure that I editorialized in favor of such taxes during the years I was editor of the Enterprise-Journal in McComb.
The taxes are advertised as tourism taxes, but they aren't purposed to draw tourists. Rather they are to tax people from out of town, as well as anyone local who may have need of a hotel.
In some towns such as Oxford, where I now live, there is an extra tax on both hotels and restaurants. The restaurant tax, of course, is paid by locals as well as visitors and is a nice revenue source for the city.
These taxes are a way cities can essentially raise sales taxes above the limit on certain items.
Obviously they are popular since it takes local consensus to get them enacted.
Local and private legislation is required to impose the taxes. That means the governing authority of a municipality has to get its local legislative delegation to introduce “local and private” legislation for the tax.
Generally it passes unless a member of the legislative delegation balks — maybe because the money isn’t going to be spent the way he or she thinks it should be or because of other political disagreements.
But it’s amazing how diverse political factions can come together on these issues.
What causes me to reflect on such taxes were two news stories last week.
The Daily Journal of Tupelo reported that the town of Saltillo is a step closer to imposing a 2 percent tourism tax after the Legislature approved a local and private bill authorizing it.
If Gov. Phil Bryant approves, which he probably will, 60 percent of the city’s voters must approve the measure in a special referendum before the city can start collecting the tax on prepared food at restaurants and convenience stores.
Saltillo, in case you haven’t been there, is in Lee County, and had a population of 4,752 in the 2010 Census. It isn’t exactly a tourist mecca.
Its new tax, if Bryant and the voters of Saltillo approve, will apply to hotels as well as restaurants if the town ever gets a hotel or motel. Currently it has none, so the primary payer of the 2 percent tax will be local folks.
In McComb, the City Board recently voted to borrow $500,000 to improve city parks, pledging to pay the money back with receipts from the city’s hotel and motel tax, according to the Enterprise-Journal.
In this case out of town visitors will be helping pay for local facilities. A few of them, such as parents and players attending a sports event at one of the parks, may actually use one or more of those facilities.
But the primary payers are folks who find it convenient to spend the night at one of the hotels near Interstate 55.
The so-called tourism taxes can be confusing, primarily because specific legislation authorizes them in each locality.
They range from 1 percent in some towns to 3 percent in others and can apply to restaurants and hotels in some and one or the other in others. Some have automatic repealer dates, and some don’t.
But the confusion is in keeping with the rest of Mississippi’s tax structure. The usual 7 percent sales tax can vary, including being reduced on the sale of some major items such as automobiles and eliminated on a long list of other items.
It has often been said that Mississippi needs a thorough review of its complicated tax structure, including the many exemptions and what actually are additions to the sales tax.
But like the weather, it’s easier to talk about than to change.
Charlie Dunagin is the retired former editor of the Enterprise-Journal in McComb. He may be reached at cdunagin@enterprise-journal.com.
