Mississippi House takes 1st step to approve tax cut plan
JACKSON, Miss. (AP) — Mississippi would phase out its income tax, reduce the sales tax on groceries and set a higher sales tax rate on many other items, under a bill that advanced Wednesday through the state House.
“The bill this year is much simpler, easier to understand, and I would say to you an improved product over the bill that passed overwhelmingly in this body last year,” Ways and Means Committee Chairman Trey Lamar, a Republican from Senatobia, said during House debate.
This year’s bill also faces an uncertain fate in the Senate. Republican Lt. Gov. Delbert Hosemann has said he wants legislators to cut taxes, but he has not released a proposal.
Mississippi tax collections were higher the first half of the current state budget year, from July through December, than they were for the same period a year ago.
Republican House Speaker Philip Gunn said eliminating the income tax is his priority this legislative session because he believes the change will make Mississippi more competitive with states such as Texas, Florida and Tennessee, that don’t tax income.
Russ Latino is president of Empower Mississippi, a group that pushes for limited government. He praised the House vote and said this year’s bill is better than last year’s.
“People will have more money to invest in their families, businesses, and communities and Mississippi will be a more attractive place to move,” Latino said.
One Voice, a group that advocates policies to help low-income residents, said the House proposal “largely benefits the state’s wealthiest.”
“The state’s surplus is not enough to support much-needed investments in the public services that Mississippians want, like quality schools, affordable healthcare, solid infrastructure, safe neighborhoods, and affordable housing,” One Voice said in a news release.
The House bill would reduce the grocery tax from 7% to 4%. The change would be phased in over six years, starting this July.
The bill also would increase several taxes from 7% to 8.5% — an increase of more than 21% in that rate. That would include the general sales tax; the sales tax on alcohol; and the tax on music, games, cellphone ring tones and other products delivered electronically.
If the general sales tax were to increase by the proposed amount, for example, a person buying $100 of clothing would pay $8.50 in sales tax rather than the current $7. The increased tax amount would apply to in-person or online purchases.
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