The Newton Board of Aldermen appears that it will not pursue its 2 percent tax increase on hotels and restaurants for the 2020 legislative session.
At the board’s Jan. 7 meeting, the aldermen passed a resolution to ask the State Legislature to consider allowing the city to collect the additional tax. The tax resolution came up again at the Jan. 21 meeting, but this time, the board tabled discussion on the issue to a later meeting.
Alderman Bob Bridges said that means the issue may likely be dead, at least for consideration during this 2020 legislative session.
“At this point, I think we may not have enough time to reconsider the decision before we can deliver a resolution to our local representatives,” Bridges said. “I don’t anticipate us doing anything more at this time, but I believe we will revisit it.”
The Newton Board of Aldermen will meet twice (Feb. 4 and 18) before the Feb. 20 deadline for legislators to introduce bills for the 2020 legislative session.
Bridges, however, doesn’t think there will be enough time to reconsider this special tax levy before the Feb. 20 deadline.
“I think the board will want to look at this again, possibly for next year’s session,” Bridges said. “But nothing has been finalized. All we were going to do was ask the legislature to consider allowing us to collect the tax. If the legislature would have approved it, we (the aldermen) would still have to vote on it before we could start collecting it.
“With everything we have to do for this special levy, I think it’s pretty much dead for this year.”
According to the State Peer Review, local special tax levies assess additional taxes on purchases from business entities, such as hotels, motels, and restaurants, for purposes of local projects and community improvements, e.g., promoting tourism and economic development or enhancing parks and recreational facilities.
Although MISS. CODE ANN. Sections 19-3-40(3)(a) and 21-17-5(2)(a) (1972) prohibit county and municipal governing authorities from levying taxes of any kind or increasing the levy of any authorized tax unless specifically authorized by another state statute, a county or municipal governing authority wanting to utilize an additional funding source for tourism or other development may present a request to the Legislature for a bill providing specific authority for such taxation within its jurisdiction.
If passed by the legislature and signed by the governor, the special tax levy requires final approval from the requesting locality, either by ratification by the local governing authority or popular referendum. After approval the local governing authority notifies the Department of Revenue (DOR) and provides to it a copy of the resolution adopting the local tax levy. Collection on such a tax will commence on the date specified in the bill.
Currently, the only special levy in place for Newton is a $1 per room per night charge for a hotel or motel. The purpose of the tax is to provide funds for the operation and support of the city Parks and Recreation Department. It has been active since 1996 and collected $9,381.25 in FY 2015, $10,149.70 in FY 2016 and $10,951.01 in 2017.
