As the state budget tightens and cutbacks and shortfalls in revenue ensue, one local representative aims to take a step toward diverting sales tax revenue back to county taxpayers.
Rep. Mark Formby, of Picayune, proposed several bills this session that would allow a certain percentage of sales tax revenue collected from businesses outside municipalities to be paid to the county coffers.
Formby’s House Bill 863 would require 9.25 percent of sales tax revenue collected from businesses outside city limits to be deposited into the motor vehicle ad valorem tax reduction fund.
As it stands now, all sales tax collected outside municipalities goes directly to the state, Formby said.
“For years, the agreement was the county gets all the property tax, so sales tax just went to the state. But also during that time there wasn’t a lot of development in the counties,” he said.
Now, with development increasing outside municipalities, there is more revenue potential for the county, Formby said.
Through this legislation, Formby said he has two missions, one is to give counties a reason to promote business growth outside municipalities, and the other is to put money back in taxpayers’ hands.
By diverting 9.25 percent of sales tax to the ad valorem tax reduction fund, taxpayers would see a larger discount on their car tags, Formby said.
Car sales have decreased, he said, but taxes have continued to go up. This measure would, “give money back into the county where it came from,” Formby said.
Over time, Formby said he hopes to pass legislation that would equalize the portion of sales tax sent to the county with what is sent back to municipalities, which are currently given 18 percent of sales tax revenue collected in a city’s limits.
“This is sort of a weather balloon for me, we take this 9.25 percent and see how it floats,” Formby said.
If the county were to receive 18 percent of sales tax collected outside municipalities that would take $50 million out of the state budget, Formby said.
“I’m a conservative, but I’m also a realist,” he said.
With Governor Phil Bryant cutting another $53 million out of the state budget this year, the state can’t afford to lose $50 million to its counties right now, Formby said.
“People are still going to benefit from money being in state coffers, but I’m trying to get the benefit closer to the person that buys that soft drink or sandwich in a county store,” he said. “Everybody buys car tags, not everyone owns property.”