As state officials scramble for resources to address infrastructure concerns in the wake of the closure of over 100 Mississippi bridges deemed unsafe by federal authorities, the stance of some of those same state officials on collecting Internet sales taxes seems particularly relevant.
Gov. Phil Bryant took the step of an emergency declaration to close the bridges, but state and county officials have known about the deteriorating bridges for a long time. Some state elected officials, including both executive and legislative branch, have flatly refused to consider any solution to the poor state of Mississippi’s roads and bridges that can be labeled a tax increase.
Possible revenue sources that have been rejected include a hike in the state’s gas tax, increases in vehicle registration fees, and other general hikes in the cost of road and bridge use.
Last adjusted in 1987, Mississippi's 18.4 cents per gallon state gas tax (CPG) is a flat tax. Whether gas is $1 a gallon or $5 a gallon, the state gas tax is still 18.4 CPG.
The only way the state takes in more revenue in gas taxes is for the volume of gas consumed to increase – and improvements in fuel efficiency and consumer behavior in buying more fuel efficient cars have made that difficult if not impossible to realize. The fact is that Mississippi’s gas tax isn’t keeping pace with the inflation of rising highway construction and maintenance costs.
A 2012 national report found that Mississippi has an estimated $30 billion in highway and bridge needs between 2008 and 2035 but that the state’s current gas tax structure would only generate $15.3 billion to meet those expenses.
But one thing is certain – one segment of the state’s tax revenue stream that has been endangered by changing technologies could be fixed not with a new tax, but with full collection of an existing tax that has been on the books continuously since 1932 – sales tax.
We pay sales tax as a matter of course in bricks-and-mortar stores in Mississippi, but state lawmakers have by and large been unwilling to level the playing field for Mississippi mom-and-pop retailers by allow out-of-state online retailers to avoid collecting those same taxes in our state.
Lt. Gov. Tate Reeves has been the most consistent opponent of Internet sales and use tax law changes in Mississippi. Reeves in 2017 shut down a House effort to impose full collection of the state’s existing sales tax. The House passed a bill on a 76-41 vote that would have required out of state businesses with more than $250,000 in sales but no physical presence or “nexus” in Mississippi to collect and remit sales taxes from Mississippi customers.
In explaining state Senate opposition to the House bill, Reeves said: “Frankly, we believe the bill is unconstitutional. I have yet to hear from one lawyer who thinks otherwise, including many of the House members who voted for this bill. They would tell you the most likely scenario is that if this were to pass, it simply put Mississippi in litigation along with Alabama and other states.”
Reeves cited the 1992 Quill case in North Dakota as the basis of his opposition. In that ruling, the high court held that states generally could not collect sales taxes from a seller that did not have a physical presence or “nexus” in that state.
After more than 25 years kicking the can down the road on the issue, the U.S. Supreme Court is now poised to bring some clarity to the issue this summer. South Dakota and 35 other states have asked the high court to in the current South Dakota v. Wayfair to declare that the “nexus” or “physical presence” rule established in 1992 in Quill is outdated and punitive to bricks-and-mortar retailers at a time when Americans are increasingly doing their shopping online.
Without the Quill case to give them political cover, a Wayfair case decision that eliminates the “physical presence” obstacle to full collection of online sales taxes will leave state Republican leaders hard pressed to continue to avoid letting 2018 technologies finally catch up with a 1932 Mississippi tax initiative.
Infrastructure and old bridges are just a few issues that this “no new tax” revenue source could fund that desperately need attention in our state.
Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.
Wednesday, April 18, 2018
Sid Salter: Will South Dakota case bridge new revenue for Mississippi?
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21 comments:
Good God is Salter out to lunch. The money wasted in Mississippi government at present could more than cover infrastructure needs, but Salter is out in the open as a full-out SHILL for the machine to promote more taxation. He is a disgrace.
Sid, Get back to us when you have an original thought. Why in the world would we want to turn over more of our hard earned money to the idiots (at all levels of our government) who can't manage what we give them now ? I pay enough already !
What Kansas and Sid have failed to consider is that Amazon and national chain sites are already charging state tax and sending it to the states with few exceptions.
It's fine to enforce the tax those national companies but a blanket sales tax put start ups, small businesses and arts and craft shops in jeopardy.
They do not have the profit margins or resources to file taxes separately in 50 states to prove they did no more than break even or lose money. but are trying to stay in business and compete by creating their own humble sites.
Often the " little guy" retailer is trying to get rid of excess merchandise that didn't sell in his local market at his cost or less.
To make things worse, the new " tax reform", no longer gives a break for taxes paid to multiple states so the " little guy" will be paying tax in another state on merchandise that has no profit so his loss is greater.
More importantly for the future, the internet websites can help the guy " that builds a better mousetrap" compete with the " too big to fails". You already can see that in sites like " Quick and Loan".
It wouldn't surprise me if this idea, like so many regulations in the last couple of decades, are actually proposed and driven by the mega corporations as ways to rid themselves of smaller competitors.
Please people, before taking a position or grabbing on to a solution, try to understand the issue and think it through and look at long term consequences.
Your overall focus should be based on the truth that the role of government in a capitalistic society is to level the competitive playing field so only the best " widgets" and " businesses" emerge and so supply and demand actually drives price. It is NOT to enhance profit for individual businesses or save businesses from their mistakes or finance business.
The big picture and the details matter...so does acquiring knowledge about a subject before you form an opinion.
Serious question for you lawyer types - how can the taxpayers of Mississippi be assured that the sales taxes they pay to out-of-state internet or mail-order retailers will actually be remitted to/collected by the MS Dept of Revenue.
For instance, Amazon, who voluntarily collects MS sales tax from MS residents, may choose or neglect to remit those collections of sales tax to the State. How will MS DoR enforce collection?
Those companies have no assets in MS that can be seized or levied. Meanwhile, the taxpayer has already paid the tax to be held in trust pending payment to MS DoR.
Our leaders in the past built the roads, streets, and bridges from the ground up.
Now we have leaders that cannot even repair those same streets, roads, and bridges.
We do not need any more taxes heaped upon us, we need real leaders.
the next time you go toward the gulf coast, look at how many MDOT employees are doing nothing or sitting in a running vehicle with the engine running. This makes a good case for outsourcing the road repairs where there is an incentive for saving on cost cutting. Not to mention the retirement fund savings over the long run.
Agreed 9:54 - with "leaders" like Reeves, Mississippi will stay 50th without a sliver of optimism that this State will ever improve economically or politically. We need Mississippi to be a place people and businesses alike want to move to. We will stick to our State flag, hating of the gays, cronyism at all levels of governments both State and local and refuse any kind of forward thinking like a lottery or legalizing pot. Nope, lets stick to our good ole Christian values that our leaders like to tote to make sure to get elected all the while portraying/living none of the actual teachings of Jesus.
10:23 - drive down I55 South from I20 thru Byram. Seems like almost no workers/work daily & if there are any they're standing/sitting around shooting the breeze.
11:20
If we could have ever gotten Dick Hall out of office, then the Ridgeland work wouldn't have taken five years and the Byram work wouldn't have taken ten years, and counting.
I would vote for Fidel Castro before I would vote for Dick Hall.
As usual everyone has decided to jump on Sid instead of discussing the subject at hand. The "internet sales tax" is real, and it's coming and there's nothing we can do about it. The law requires people who sell things in Mississippi to pay a tax, and it won't be long before Congress will fix the South Dakota issue. Our efforts need to be in pressuring for a tax decrease elsewhere that will offset the increase so the government won't be encouraged to grow.
(1) Texas has no state tax. How does that work?
(2) Bill obviously didn't read the prior eight posts.
(3) Salter is still Salter. Yet people buy his columns.
@12:49 - (1) is incorrect - Texas does have a state sales tax.
1:19 I'm pretty sure when I lived there that Texas had no state income tax but did have sales tax. I don't think that has changed.
Salter promotes the same old failed policies of tax tax tax and waste waste waste. He's probably never managed a real budget (of other people's money) within its limits and produced real results in his life. That's why we "attack" this buffoon who keeps promoting this shite. @ 9:50am has a great question still to be answered: HOW on earth will those collections be enforced? Government entities LOVE creating streams of tax collections without any accountability....we already have enough of that to stop without Salter Socialists loudly promoting it.
Classic Salter: gobs of numbers but the entire piece could have been done with just the first paragraph and the last two.
Great idea, Sid. Let's pile on a new tax and then kick back while the politicians lead us to glory and #49land.
Well, we haven't managed what we were supposed to for the last few decades so it will take more to catch up, please give us more, we will really do it this time.
The Dic Tater not wanting to pass a bill during the 2017 legislative session because it would wind up in litigation? What a joke! It did not keep him from approving an abortion bill during this past legislative session that he knew would wind up in litigation.
7:29am and 8:00am How idiotic to think that anyone can still operate the state's infrastructure system on funding from 1987. Sid continues to bring up oblivious points that any business person would and most understand. I don't know anyone begging to pay taxes but at least this is in the form of a "user fee." You don't pay the tax if you are not using the road.
You're right, 12:49. Only a third of the comments mention Salter without much else in way of commentary. I stand corrected.
increases in vehicle registration fees
A muthertruckin' lie! I'll be got'damn! Especially as a resident of Jackson, I wish that little bootleg joker would suggest that sh*t!?
We pay astronomical tag fees in this state.
Mississippi penalizes the consumers and gives all the kickbacks to the corporations that pad the campaign pockets of the elected officials.
Gotta stop the madness
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