April 14, 2009
JACKSON -- People toiling to have their income-tax returns done by Wednesday''s deadline can look ahead to a variety of changes the state Legislature recently made for Mississippi''s tax structure.
Most of the legislation impact sales taxes and take effect in July.
Among the new laws are a sales-tax holiday and a broadened sales-tax exemption on home-medical supplies for Medicaid and Medicare recipients. Another law makes sure people pay sales taxes on downloaded music and video bought through the Internet.
The Legislature approved a bill to provide an income-tax credit for furniture makers, but it was vetoed by Republican Gov. Haley Barbour.
Bills that died include measures to expand the homestead-tax exemption and cut the business-inventory tax.
The Legislature convened its annual session in January and recessed April 1 to return later to pass the state budget.
Still in flux this legislative session: a cigarette tax increase, the state''s diminishing car-tax reduction fund and a hospital tax to help plug up a Medicaid budget deficit.
Lt. Gov. Phil Bryant said the tax reductions passed by the Legislature are among the top achievements of the 2009 session.
"Targeted tax cuts were a central theme in my common-sense agenda. In this tough time, these tax cuts will help stimulate Mississippi''s economy," said the Republican Senate president.
That was the impetus behind the furniture-industry tax break that passed the Legislature but which Barbour vetoed.
"This vital manufacturer is literally hanging on by its fingernails, and the governor''s action is simply hammering Mississippians who need jobs," said House Speaker Billy McCoy, D-Rienzi.
Barbour said the furniture-tax bill is flawed and would cause a state revenue loss with no assurances it would save jobs.
Signed into law
Tax bills Barbour did sign into law include:
The tax bills that died include:
However, it died in the House, where detractors said the measure could cause counties, cities and school districts to raise property taxes on younger residents and car owners to offset revenue lost from raising the homestead exemption.
It would "adversely affect the state budget, conflict with existing state law and create loopholes that limit its value. It also singles out the furniture industry but would not cover other important Mississippi businesses, which are also struggling," Barbour said.
Barbour''s veto prompted a sharp reaction from the Democratic-led House of Representatives.
"Saving existing industries are just as important as trying to attract new industries. I would hope the governor would reconsider and try to provide assistance for the people who are hurting in this industry," said House Majority Leader Tyrone Ellis, D-Starkville.
A 67 percent majority in the House and GOP-controlled Senate is necessary to override the governor''s veto, which has never been done by the Legislature since Barbour took office in 2004.
Another bill enacted this year changes the name of the Mississippi State Tax Commission. Effective July 1, it''ll be known as the Mississippi Department of Revenue. Senate Bill 2712 also creates a special board for tax appeals. Under the old law, the three-member Tax Commission hears such appeals. The new board will be an independent agency.
Many of the tax bills were recommended by a Barbour-appointed commission, which studied Mississippi''s tax structure last year and suggested how to change it.
"The commission found that Mississippi has a diversified and balanced tax structure which ranks well in national studies but with room for improvement in specific areas," state its report.
In calculating Mississippi''s overall tax burden, the commission said people earning less than $30,000 a year paid 13 percent of their income in taxes. Those making $50,000 or more a year paid 20 percent and higher in taxes.