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Mississippi: For or Against Remote Sales Tax?

  • Feb 12, 2013 | Gail Cole

Mississippi House Bill 933 passed in a landslide vote on February 7. Then lawmakers actually learned what was in the bill, and 11 Republicans lawmakers changed their minds. The official vote is now 107 to 11 -- still a resounding "yes" -- and the bill has been "Recommitted to Committee."

The title of HB 933 is "Sales tax and use tax; revise certain definitions regarding doing business in this state." The summary of HB 933 reads:

"An act … to revise the definition of the term "doing business" for purposes of the state sales tax law; … to revise the definition of the terms "persons doing business in this state" and "persons maintaining a place of business within this state" for purposes of the state use tax law; … ."

Section (6)(b)(i) reads:

"A person shall also be presumed to be doing business in this state if the person enters into an agreement with one or more residents of hit state under which the resident, for a commission of other consideration, directly or indirectly refers potential customers, whether by a link on an Internet website, by telemarketing, by an in-person oral presentation, or otherwise, to the person, if the cumulative gross receipts from sales by the person to customers in the state who are referred to the person by all residents with this type of an agreement with the person is in excess of Ten Thousand Dollars ($10,000.00) during the preceding twelve (12) months."

The National Conference of State Legislatures, referencing a University of Tennessee study, notes that Mississippi missed out on approximately $303,286,360 in uncollected use tax revenue from remote sales in 2012. In other words, it would make sense for Mississippi to want that revenue. Former Governor Haley Barbour (R) urged the Mississippi Legislature to support federal legislation enabling collection of remote sales tax. He acknowledged that "there is simply no longer a compelling reason for government to continue giving online retailers special treatment over small businesses who reside on the Main Streets across Mississippi and the country." Incumbent Governor Phil Bryant (R), however, opposes remote sales tax. When he was governor-elect, his spokesman said, "The federal government prohibits this practice and the governor-elect is not in favor of raising anyone's taxes in these tough economic times." His position is shared by a handful of Republican legislators, as reported by Tax Analysts.

Mississippi lawmakers have killed remote sales tax legislation in the past. HB 135, which would have provided "that a person doing business in this state who makes a remote sale is subject to the power of this state to levy and collect the use tax…" died in the Ways and Means Committee in March of 2012. HB 363, which would have subjected certain remote sales to the use tax, also died in committee.

For now, HB 933 still lives in committee. It remains to be seen if it can outlast its past peers.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.