Bryant joins growing GOP chorus supporting online sales tax collections
In his Fiscal Year 2018 Executive Budget Recommendation, Gov. Phil Bryant joined what has become a growing chorus of conservative Republicans who are willing to talk seriously about state legislation to collect Mississippi’s existing seven percent sales tax on online sales as well as counter sales at bricks-and-mortar businesses in the state.
In the EBR, Bryant concluded his opinions regarding online sales tax collections in this unequivocal manner: “These approaches do not create a new tax. They would simply allow Mississippi to enforce the collection of a tax that has been in place for decades.”
In the statement, Bryant gives political voice to a realization that a growing number of state legislators in both parties are beginning to get behind – that as the shopping habits of Mississippians change along with the rest of the country, Mississippi is losing sales tax revenue that simply cannot be replaced unless Mississippi takes steps to tax online sales the same as counter sales.
Lawmakers like Rep. Trey Lamar in Senatobia and Rep. Mark Baker in Brandon have spoken in favor of considering full collection of Mississippi existing sales taxes.
Or as noted before in this column – it isn’t a new tax to ask the guy in Pontotoc who bought a hammer online to pay the same sales tax as the guy who bought the same hammer in a Pontotoc store.
Here’s what Bryant said on the subject in his FY 2018 EBR:
“While brick-and-mortar retailers collect sales tax at the point of purchase, online retailers without a physical presence in the state do not. Legally, a use tax is still owed to the state but compliance is low.
“Three years ago, Secretary of State Delbert Hosemann convened a working group of Mississippi business owners, local government leaders, accountants, attorneys, professors, state revenues officials and trade association representatives to discuss these revenue fairness issues.
“The working group estimated that Mississippi was losing $67.2 million annually in uncollected taxes on remote sales. The National Conference of State Legislatures estimates Mississippi’s loss at over $134 million.
“Congress could step in and pass legislation requiring online sellers to collect state taxes and remit them to the state of destination. Alternatively, the U.S. Supreme Court could reverse its 1992 ruling in Quill v. North Dakota, opening the door for Mississippi and other states to enforce their sales and use tax laws against businesses that currently lack a physical presence. Until there is action at the federal level, policymakers should consider establishing a voluntary remittance program for out-of-state online sellers.
“Alabama adopted one of these programs in 2015. The Mississippi Development Authority will also continue to recruit major out-of-state merchants to Mississippi.
“These approaches do not create a new tax. They would simply allow Mississippi to enforce the collection of a tax that has been in place for decades,” Bryant said.
Lt. Gov. Tate Reeves and House Speaker Philip Gunn are leading a legislative tax policy study committee in which the legislative leaders said “everything is on the table” as the committee looks are state government finance.
With Republican leaders taking a long look at full collection of state sales taxes coupled with Alabama’s legislative move in that direction, the online sales tax collection battle may well be at a tipping point. That tipping point is also influenced by the fact that state revenue collections have been stagnant or declining for several months now.
Bryant, Reeves, Gunn, and the majority of Republicans they lead aren’t necessarily ready to talk about new taxes in virtually any form. But will they move on what is an effort to fully collect an old tax that’s been on the books since 1932? It appears that the political stars are coming into alignment – and not a moment too soon for Mississippi retailers who have labored in battles with online competitors that hold an automatic seven percent price advantage when sales taxes are foregone online.
Sid Salter is a syndicated columnist. Contact him at firstname.lastname@example.org.