Legislature pushes for sales-tax holiday

March 20, 2009

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JACKSON - The House gave final approval Thursday to a bill exempting clothes from sales taxes in the last weekend of July each year. 

 


House Bill 348 now goes to the governor for his signature. 

 


The sales-tax holiday is aimed largely at giving relief to parents buying clothes for their children as the school year starts. 

 


The House and Senate in recent years have passed bills for this, but they''ve wound up dying in one chamber or the other. This is the first time they''ve agreed. 

 


"It''s something the people want," House Ways and Means Chairman Percy Watson, D-Hattiesburg, said after the House voted 121-0 to agree with the Senate''s version of the bill authored by Watson. 

 


The legislation would exempt clothes and shoes individually valued less than $100 from the state''s 7 percent sales tax. The annual tax-free period would be the last Friday and Saturday of July. Watson said it won''t cause a large revenue loss for the state or cities. 

 


"I don''t think it''ll have a major effect on the state treasury," Watson said. 

 


It''s uncertain if Gov. Haley Barbour will approve the bill, but he has stressed his desire to reduce taxes. 

 


Senate Finance Chairman Dean Kirby, R-Pearl, expressed hope merchants will use the sales-tax holiday to promote sales with price discounts. 

 


City boards worried about revenue losses can opt out and require sales taxes to be imposed on the exempt items the last weekend in July in their municipalities. 

 


Sales-tax holidays exist in 13 states, according to the Federation of Tax Administrators. 

 


The House on Thursday also voted to send the governor a bill to provide sales-tax exemptions for prepaid meals sold on college campuses. House Bill 856 would apply to students at any public or private university or college in Mississippi. 

 


Mississippi colleges in 2005 were ordered by the state Tax Commission to start imposing sales taxes on campus meal plans. The commission said it can''t exempt colleges from the state''s 7 percent sales tax for prepaid packages that students buy each semester for on-campus meals.  

 


Individual campus food purchases have always been taxed, but a 50-year-old Tax Commission exemption had been in place for college room-and-board fees that include meals. However, meal plans have become so distinct with many options that they can''t be exempt without a change in state law, the state Tax Commission said.