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House approves sales tax for cities

A bill written by Mississippi Representative Mark Formby of Pearl River County that would allow municipalities to establish a sales tax after the residents of the municipality votes to approve the tax, has passed through the Mississippi House of Representatives.

The bill would allow local government leaders to avoid going to the state legislature for approval to set up a local election to vote on sales tax.

The bill says the special sales tax rate can’t be more than one percent of the gross proceeds of sales.

Some of the things the local government can vote to set up a sales tax on include: gross proceeds from sales of hotel and motel rooms for lodging purposes, gross proceeds of sales for food and beverages in restaurants, retail sales of food for human consumption not purchased with food stamps or other federal agency, gross income of businesses engaging or continuing in the TV cable system business, subscription TV business or other similar activities.

The bill goes on to say the local government must adopt a resolution declaring the sales tax amount that would be imposed before holding a election.

The municipality would also have to publish a notice in the newspaper for three consecutive weeks before holding the election.

A commission would also be established to create and adopt a master plan that would dictate how the special sales tax revenue would be spent.