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Mississippi among states where sales tax is largest revenue source

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Study: Mississippi among minority of states most dependent on sales tax

The individual income tax, which House Speaker Philip Gunn, Gov. Tate Reeves and others want to eliminate in Mississippi, is the largest source of revenue in 33 states.

Mississippi is among 14 states where sales tax is the largest source of revenue, according to a recent report by the Pew Charitable Trust, which researches and offers assistance to governmental entities on various policy issues.

Recent reports by Pew reveal that most states, including Mississippi, are experiencing significant increases in revenue collections and those increases are fueled by strong collections of most general taxes, including the income tax and the sales tax.

“Tax revenue is one factor that helps explain recent widespread state budget surpluses,” according to a report from Pew.

Currently, according to data compiled by Pew, tax collections are robust both in states that rely primarily on the sales tax and those that are dependent on the income tax.

Mississippi is no exception. With one month of data still to collect before the fiscal year ends on June 30, tax collections in Mississippi are nearly $1.3 billion above the official estimate. The official estimate represents the amount of money legislative leaders projected would be available during the session to build a budget for the upcoming fiscal year beginning July 1. Money above the official estimate goes into reserve funds.

During the 2022 session, the Legislature appropriated $951.1 million in reserve funds. The bulk of that funding went for a litany of one-time projects – such as on government buildings repair, renovation and construction, and on tourism projects across the state.

Based on revenue collections through May, the Legislature also will have a substantial amount of reserve funds for the 2023 session.

In addition to being almost $1.3 billion above the official estimate, tax collections also are $615 million or 10.25% above the amount collected during the first 11 month of the previous fiscal year. Through 11 months of the fiscal year, the personal income tax collections are up $276.7 million or 13.8% while the general sales tax collections are up $291.4 million or 14.4%. Other elements of the sales tax, such as the tax levied on out of state purchases, also are up.

In the coming years, Mississippi will be even more reliant on the sales tax. During the 2022 session the Legislature reduced the state income tax – beginning in the 2023 calendar year – by eliminating the state’s 4% tax bracket on people’s first $5,000 of taxable income. The 5% tax on remaining income will drop to 4.7% for 2023, then 4.4% for 2025 and 4% starting in 2026. The changes will reduce state income tax revenue by $525 million when fully enacted in 2026.

Both Gunn and Reeves have expressed support for fully eliminating the income tax in the coming years.

“We have talked a lot about moving toward a full elimination of the income tax. I believe that is still the goal. We want to make sure we continue that fight,” Gunn said during the 2022 session earlier this year.

Such action would further position Mississippi among the minority of states more dependent on the sales tax for revenue than the income tax. The sales tax is viewed as a regressive tax that places a larger tax burden on low-income residents than does the income tax.

According to research by Pew, Mississippi currently garners 45.2% of its revenue from its general sales tax, which is 7% on most retail items. This would also include the excise tax levied on out-of-state purchases, primarily those made via the internet. The personal income tax accounts for 26.9% of the state’s revenue, according to Pew.

But that number will decline in the coming years as the income tax is reduced, with the hope by some, of eventually eliminating the tax.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi News

Events happening this weekend in Mississippi: December 20-22

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www.wjtv.com – Kaitlin Howell – 2024-12-20 12:03:00

SUMMARY: This weekend (December 20-22), Mississippi offers a variety of festive events. In Jackson, enjoy Food Truck Friday, candlelight concerts, a Grinch movie screening, and Journey to the North Pole. In Ridgeland, experience Merry Bingo, Christmas on the Green, and Fleet Feet Coffee Run. Vicksburg hosts Rock the Halls, while Natchez offers a European Christmas Shopping Village. Other activities include Santa scuba diving at the Mississippi Museum of Natural Science, Million Dollar Quartet Christmas, and Magic of Lights in Brandon. Hattiesburg features Lights of the Wild and Teddy Bear Tea with Santa. Numerous holiday events are available across the state.

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Mississippi News

Attorneys seek protective order in Jackson bribery case

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www.wjtv.com – Kaitlin Howell – 2024-12-19 14:36:00

SUMMARY: Prosecutors in Jackson are seeking a protective order to prevent the release of sensitive information in a bribery case involving Hinds County District Attorney Jody Owens, Jackson Mayor Chokwe A. Lumumba, and City Councilman Aaron Banks. The motion aims to protect personal, financial, and grand jury information, fearing it could impair investigations and fair trial rights. The three officials face charges related to a bribery scheme involving $80,000 in bribes for approving a real estate development project. Other individuals, including former City Councilwoman Angelique Lee and Sherik Marve Smith, are also implicated, with Smith pleading guilty to conspiracy.

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Suspect in the killing of UnitedHealthcare’s CEO struggles, shouts while entering courthouse

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www.wjtv.com – MICHAEL R. SISAK and MARK SCOLFORO, Associated Press – 2024-12-10 14:27:00

SUMMARY: Luigi Nicholas Mangione, a 26-year-old Ivy League graduate, was arrested in Pennsylvania and charged with the murder of Brian Thompson, CEO of UnitedHealthcare. Mangione, who expressed disdain for corporate greed and the health insurance industry, was found with a gun matching the murder weapon and fraudulent IDs. He initially gave false identification but was recognized at a McDonald’s. Mangione, who wrote a three-page document expressing anti-corporate sentiments, is being extradited to New York. His family, shocked by his arrest, expressed condolences to Thompson’s family. Mangione had no prior criminal complaints but had a history of severe back pain.

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