Tuesday, July 10, 2018

Jay Hughes: Internet Sales Tax & Cheating Your Hometown

With a looming special session and all the rush to be “for” or “against” an internet sales tax, it’s important to understand what it really is and how the state legislature is about to rob your local cities to try to hide what they have failed to do in recent years for roads and bridges, and many other things that might risk precious reelection for many of them. Few people realize that Mississippi has always had a sales tax on anything we buy from out of state. The burden has simply been on the buyer to voluntarily report and pay it. The U. S. Supreme Court has now changed that equation so states can make the seller collect the tax and send it to the state.

How is sales tax revenue important to your local community? When you buy things at the local grocery store or hardware center, they collect sales tax and then send it to the state Department of Revenue. Once the tax dollars get there, they use a fancy little computer and send 18.5 cents of every 100 cents right back to the city that collected it. This is what your local government uses to pay for things such as police and fire protection, roads, sewer, garbage, libraries, animal shelters, jails, etc. It also helps keep your local property taxes from increasing.

When people started buying more items online a few years ago, those sales taxes weren’t collected by your city, meaning less money went to operate your local government and basic services got shortchanged. With the new court ruling, somewhere between $100 - $200 Million will be coming into Mississippi from internet sellers. The problem is that the state leaders claim it is just too darned complicated for their fancy computers to figure out where those purchases came from in Mississippi, so they will just keep it in the General Fund (pronounced “Lawmaker Begging Fund”).


If the state decides to just keep all the internet sales taxes, it will mean that the 18.5% won’t get back to your town and the legislature won’t be sending the required portion to the classroom supply fund either. So, despite the loud political cries of wanting more money going into the classrooms, even less will go there if the new revenue jumps right into the General Fund. This means that 18.5 of every 100 cents of internet sales taxes people pay will go to the state and not to their local towns. Sadly, instead of benefiting our communities, these internet sales tax dollars will simply plug holes in the state budget so career politicians can pretend everything is just fine.

The spin you will hear is how complicated it is to try to figure out where the online purchases came from, so they must just keep it. To that I say hogwash! If Amazon’s computers can figure out how to get a whoopie cushion to my front door overnight, the state can surely figure out where that sales tax came from. If you feel the same way, you better make sure your state representative and senator know how you feel before they get to Jackson for the Special Session and get handed a blank check on your account.

Mr. Hughes is a State Representative from Oxford. 

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49 comments:

Anonymous said...

Money is the mother's milk of politics.

Anonymous said...

If the assertion is true that the State cannot figure out which City the sales tax money should go to, then a simple allocation from the General Budget of 18.5% of any out of state sales tax collections could be allocated to each city based on some definable statistic, such as population of each city per the last reporting of such to the State. I cannot believe something like this will not be suggested as a method to allocate the collections from out of state sales tax money.

However, with technology as it is, I too find it difficult to believe that some mechanism is not out there to track where each purchase came from. I guess the question remains then whether that technology is available to the State of Mississippi.

Bill Dees said...

Amen! Finally, a politician who has common sense, unlike our current Lt Gov, who applied political pressure on MDOT to spend $2 million of your tax dollars to build what amounts to a private driveway from the gated entrance to his subdivision to the Dogwood Festival Market.

Anonymous said...

This is rich.....Hughes is spinning himself when he says keeping this money from the cities is keeping it from the classroom. He knows good and well the money cities receive from sales tax diversion NEVER make it to local school districts.

That said, now that Quill is no more, the state can actually collect online tax and call it sales tax, therefore sending the cities their share.

Anonymous said...

7:27. HB 722 from last session included a formula much like you described. It took the total sales tax diverted to municipalities, approximately 14% of the total sales tax collected, and then multiplied the amount of sales tax each city receives against the total diverted which then gave each city a numerator. Then the percentage of sales taxes diverted to the cities was applied to the amount of use tax collected for on-line sales, for a total sum of use tax to be diverted to cities like sales tax. Then each city's numerator was applied to the amount of use tax to be diverted. Sales tax is remitted to the cities each month. By the formula in HB 722, the annual use tax diversion to each city would equal roughly an additional monthly sales tax payment. There is a PEER report available online which outlines what each city would've received under this formula.

Tracking the location of each sale is not as easy as its made out to be. For example in Rankin County, many unincorporated areas have Brandon 39042 and 39047 mailing addresses.

Anonymous said...

Instead of 18.5%, maybe the state should remit 21% of sales tax collected the old way and then they would have the internet remitted tax to do so with.

Also, I read the glowing article on Costco and the million dollars of sales tax for Ridgeland, I thought they sales tax was going to pay for the store to be built by TIF Bonds for ten years. Is this right?

Anonymous said...

@ 7:27, you mean the 6 laneing of Hwy25/Lakeland drive from Airport Road to Castlewoods? I know your disdain for the Lt. Gov is showing, but that project has been in the works for a while now. You know, because there is more growth in that area than anywhere else in the metro. But never miss an opportunity to exploit a situation.

Anonymous said...

He is absolutely right. The state is robbing the towns of their share of what would have been collected as sales tax. Should be treated the same.

Anonymous said...

The Cities are being squeezed to death. Somehow the 'sop" of CDBG is to atone by the FEDS for robbing them. Now the State wants to do an equivalent slight of hand. Forget the city/county lines per state. Refunds to ZipCodes might be the best and fairest distribution. This is an easy method to assign to each purchase and to account at point of purchase.

Anonymous said...

@ July 10, 2018 at 8:15 AM

Have to agree with 7:27am - Kim Jung Un of Mississippi pushed for that puppy to get done. And yes I will include my disdain for that som'itch too.

He does not deserve a promotion and a Republican with a spine needs to challenge him too in the primary.

Anonymous said...

If I decide to do a wal mart grocery pick up did you know that because I ordered from the app AND picked up from a physical location the tax money does NOT go back to the municipality? That should be an easy issue to figure out. This is something local Mayors have advocated for, for at least a year now.

However, Jay Hughes is a FRAUD. He jumped on a bandwagon and promoted himself as a school advocate. These school folks are eating it up. Talk about pulling the wool over their eyes! He's a political ladder climber and he thinks this is the way to the next step on the ladder.

Anonymous said...

Another politician who only cares about taking more money from our paychecks and sending it to the government. Oh, but wait, this guy is a "straight shooter," he "tells it like it is!" Doesn't change the fact that he's still a liberal Democrat who wants to raise taxes.

Plain ol' Catfish said...

@ at 8:15 AM

MDOT attorney in a letter to the head of the homeowners’ association wrote: “MDOT instructed me to point out that this project is for the benefit solely of the Oakridge homeowners and expeditious execution (of deeds and easements) would be appreciated........................The project is ostensibly for safety of neighborhood motorists, but MDOT records show safety is not the issue and that Lt. Gov. Tate Reeves' office kept tabs on it while his neighborhood's homeowners association was deeply involved in the planning.”

Per Sam Hall of the Clarion-Ledger

https://twitter.com/samrhall/status/1016391955893379074

Anonymous said...

Why can't Michael Watson or Josh Harkins oppose Tate in the primary? They could beat Jim Hood. I wish Harper would, but I fear he won't.

Bill Dees said...

@8:15 AM. No, this is a service drive, not part of the 6 lanes of travel on 25/Lakeland. The service road was unwanted by MDOT, and they actively opposed its construction. Read the article in today's Clarion Ledger. It's long, but it has to be because it's well researched and heavily documented. I think it's available on-line. The Lt Gov, whose politics I admittedly don't like, took $2 million of our tax dollars for what amounts to a private driveway. This sort of stuff is one of the many reasons I don't care for his politics.

Anonymous said...

To Bill Dees: Tater Lane is NOT a private driveway. It IS a shortcut to Chik-Fil-A (free sandwich today if you dress like a cow), Five Guys (triple cheese please!) and Dick's Pork BBQ for Tater's snacks. Maxiumus Tater shouldn't have much problem looking like a cow.

Anonymous said...

@8:44 Tater and Harkins have gotten to be buddies you won't see that political battle.

Anonymous said...

I would love to know how many sales tax dollars Madison and Rankin counties are pulling out of Jackson annually and it has nothing to do with the internet. The parking lots at Madison shopping outlets are full of hinds county cars all weekend...every weekend. Has to be millions of dollars.

Sol Juette said...

The road to hell is paved with good intentions.

Bill Dees said...

@8:59 AM. Your comment is FTW!! Bwaahahahahahaha!! Well done, Sir! Well done!

Anonymous said...

to the Catfish:

your purported quote is incorrect.

you added things to the quote that were not in the original quote.

Anonymous said...

Mo money- that's the democrat way!

Anonymous said...

Guess my filing the amount bought out of state for 2017 was rather uncommon? Suspect most will charge me and keep it, how would that state know? greed is a strong motivator.

Anonymous said...

@ July 10, 2018 at 9:33 AM

I would love to know how many sales tax dollars Madison and Rankin counties are pulling out of Jackson annually and it has nothing to do with the internet.

That's a damn good question. Senator David Blount proposed a Tri-County/Metro Tax to balance it out, since many Jacksonians do shop in the surrounding burbs. However, the surbanites do not return those dollars to Jackson.

It did not go over too well.

But our metro area is a strange concoction because you have 3 different county's tied to one metro area. Whereas in Miami, everything falls within Dade County; Cleveland, everything is within Cuyahoga; Chicago and its suburbs a majority falls within Cook County.

Jackson is in Hinds, but its neighboring suburbs are in Madison and Rankin County's and it just goes south from there.

The Capital City Complex Infrastructure Fund will help a little to offset those lost revenues.

Anonymous said...

It's such a shame that our state leaders fought this issue instead of taking the lead with South Dakota. Or at least pass legislation that would be ready to implement betting that Scotus ruled as it did (as the state did for sports gambling). So much hypocrisy from our state leaders claiming they support small businesses created by local citizens.

Anonymous said...

@10:20, per the majority of this blog, Hinds has the niche market of the superior dining establishments and the arts. The neighbors to the north and east have the market on retail establishments. Imagine if Rankin and Madison told the collective they needed a cut of food and alcohol sales returned from their residents spent in Hinds county. Oh, and the bazillions spent at Whole Foods.

Plain ol' Catfish said...

@ July 10, 2018 at 10:00 AM

All that information was directly from Sam Hall's twitter thread/feed regarding the issue.

Anonymous said...

The (alleged) letter to the HOA, (supposedly) quoting an attorney does not sound at all like something an attorney would write. I call bullshit.

Wow said...

Waiting for KF to weigh in on Reeves. Looking forward to his thoughts.

Anonymous said...

12:14, but a Jim Hood employed attorney?

Unknown said...

@7:27 & @8:38. I appreciate the thought that I somehow have the authority to do anything in this legislature. Perhaps my article was not clear enough: I did not suggest raising a single penny in taxes. Governor Phil Bryant is the one who has said he wants to include internet sales tax in the Special Session he said to expect in August. I am merely sounding the alarm for people to be aware. And, it is very accurate that if the money general fund, it will never be allocated to the classroom supply fund, as only a third is now. J

Unknown said...

@7:27 @8:38 = Respectfully, I am not the one trying to raise taxes one penny, and never said I would or could. It is the dear supermajority that is trying to add internet sales tax to the special session next month. I was merely sounding the alarm to let people know they better talk to their reps and senators. As for the money not going to classroom supplies, I stand behind that. if it hits the general fund, it will never see the classroom supply fund the law says it should fund, just as only 1/3 of those special funds seem to be allocated each year. Thanks, Jay

Anonymous said...

How Trumpian of you, 12:14, declaring a letter most likely obtained thru FOIA fake news. Mad because the story paints your buddy Tater in a bad light, maybe? Enjoy your trips to the Chic-Fil-A on Tater Lane pal.

Anonymous said...

Does anyone still think the core of our educational problems is money ?

Anonymous said...

"I merely","I merely", Poor me...

Get over yourself. You're a know-it-all just like the rest of them. Spare us the act.

Anonymous said...

@ July 10, 2018 at 3:52 PM

So let me get this right? You are calling Jay out for using "merely"

But are perfectly fine with being snowed over by the likes of Triple Cheese Tater Thot Maximus?

So long as a Republican is screwing you over, all is well. But when a Dem is shooting it to you straight you are cynical? SMH

A fella said it best the other day

I marvel at how Fox News, the Republican Party, and Billionaires got working whites to hate the very people that want them to have more pay, clean air, clean water, affordable healthcare and the power to fight back against big banks & big corps. It’s truly remarkable.

Anonymous said...

Mr. Hughes, I say Mr. because I went to your Lt. Gov. website and for the life of me I couldn't find where you mention you are an MS State Representative - I even did a search of the site. I read your announcement speech and the Meet Jay and see no mention of you being a State Rep. So, I went to your facebook page hoping for more information. There I see you are Serving as State Representative for House District #12 at Mississippi House of Representatives.

Ok, good to know you have some legislative experience to go with your run for Lt Gov. But, the other thing I can't find on your webpage or Facebook is if are you a democrat or republican? So, I had to search your district on Ballotpedia and there I see you are a Democrat!

Now I understand you are putting yourself forward as "I’m a Christian, husband, father, military veteran, gun owner, pro-public education, and anti-government waste, and I’m willing to fight for what is just and right." And those are great qualities, but why no mention that you are running for Lt. Gov. as a Democrat? Seems disingenuous.

I guess while you seem to have some good ideas and qualities, until you are willing to put Democrat front and center on your site, FB page and Imagine Wagon, I don't see a reason to support you. You are not fooling anyone, and you aren't Jim Hood. If you are running for LT. Gov. you need to answer for the Democrat party and the values they are trending towards today. No amount of Christian, gun owning etc. can make up for still being a member of the Democratic Party.

Anonymous said...

@4:42pm "I marvel at how Fox News, the Republican Party, and Billionaires got working whites to hate the very people that want them to have more pay, clean air, clean water, affordable healthcare and the power to fight back against big banks & big corps. It’s truly remarkable."

Who are these people you claim that want them to have more pay, etc. Sure as heck ain't the Democrats. Your fella who said it best is clearly delusional.

Anonymous said...

'It all begins with education'. 'For the, ah, children' (I spelt it korectly). 'More money for classroom supplies'.

This Hughes character actually believes he can be elected to statewide office with that mantra. The legislature won't even include 'classroom supplies' in the several tax-free holidays.

Anonymous said...

Do all of you Tater Haters realize that your big mouths shut down his road?

http://www.msnewsnow.com/story/38614924/mdot-postpones-lakeland-drive-expansion-project-phase-2

"I'm not saying we're not going to do it, but we're going to postpone it and re-evaluate the need for it," said MDOT Commissioner Dick Hall.

Monday, MDOT said "political pressure" is why it's building a $2 million access road to a gated subdivision where Lieutenant Governor Tate Reeves lives.

Anonymous said...

The new minority will feel it right here in Mississippi first. Think Pelahactie on a statewide basis. Many understand that we can't continue with the status quo. How in the world do you think Tweeter got elected?

Anonymous said...

Tate looks bad all the way around today, but Dick Hall and Melinda look like that have little to no control over their agency after today. They were about to let the bids and if someone hadn’t leaked whatever proof their is, they would have let the bids. They have already spent $300k! Makes one really wonder what is going on at MDOT

paulo said...

I agree on both sides change is a coming.

3:52 said...

@ 4:42, I call him out because he is like the rest of them. The main difference seems to be that Tate Reeves doesn't try to snow job me into believing he's a public servant. Jay Hughes does; but language like that shows that he's just playing a part like the rest of them.

Anonymous said...

Driving down Lakeland this morning.....There were two TV station vehicles parked adjacent to Tater Lane. Looked as if they were going to pounce on King Tater as he left his 'hood.
Move along folks. Nothing to see here. This story is now old news. The King lost.

Anonymous said...

"It all begins with education". Catchy yet meaningless.

Anonymous said...

Those of you harping the road and Lakeland Dr leapfrogging over other MDOT projects need to get a grip. Any moron can see that widening Lakeland was an economic necessity. As far as the little side road to his neighborhood, so what. Looks like it's not happening now. Great, CL gets a moral liberal victory.

Back to Lakeland: Net Sales Report FY 18 through Jan. per county:
HINDS 3,637,073,527
HARRISON 2,676,850,958
RANKIN 2,365,612,994
LEE 2,302,874,258
DESOTO 2,201,071,116
MADISON 1,542,710,612

As you can see the Tri-County combined Nets $7.4B in Sales for the state. So, yes Lakeland Drive, just like I-55 N/S and I-20 E/W deserves all the attention it needs to drive economic growth. And that goes for Old Canton, State St. and any other major artery in and out of Jackson through Madison or Rankin. Suck it haters who despise that Feel and Tater and Harkins... live in Rankin County. The same cries would come if they lived in Tupelo with the growth there.

I live in Madison and rarely go to Dogwood or further down Lakeland, but I can recognize when an area needed infrastructure to match the growth. So, kudos to Tate if he leapfrogged the $43 million Lakeland job. Shows he knows when a project is needed when piss-poor MDOT management doesn't act. I'm sure State fans appreciate the new lanes when heading out of Jackson. Last I checked, Feel and Tater went to USM and Millsaps.

But, I'm sure we will see more of these silly stories leading into the silly season and the CL doing all it can to get Hood elected. All you Tate haters who say I could never... are going to rue the day when MS is lead by a D again. If you want to play into fake media narrative of this Blue wave in the face of Trump, then you deserve the woke silliness that will come with it.

Anonymous said...

Uh...I buy online. The sellers know where I live. It's where they send the stuff I purchase.

Are y'all really so clueless about computers and business that you don't think that customer and shipping records are kept and can be accessed by city?

And, good grief, purchases are made with credit cards. You don't think the addresses are connected to the cards?

You really don't think such records are important for target marketing?

A friend of mine does a large online business. Her 11 year old son could access that information by state and cities in each state in less than an hour.




Anonymous said...

Notice how Tater carefully makes statements like: I don't recall having spoken to anyone at MDOT about this project recently. It could have been others in my HOA, but I have not personally contacted anybody about this road. Since this initially came up, I've not involved myself at all in the discussion. I've had no conversation, personally, with higher officials at MDOT regarding this proposed project. I did not have sex with that man, Mr. Hall.


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