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Internet tax legislation passes House

By BOBBY HARRISON

The Republican House leadership guided to passage Wednesday legislation to tax remote (internet) sales, but not without causing some consternation among members of the House majority.

The legislation, which passed 79-38, would use the revenue generated from the tax for road and bridge needs, both on the state level and for counties and municipalities.

Those voting against the proposal included 13 Democrats and 25 Republicans. The Republicans were particularly vocal in their opposition to forcing those who make online purchases to pay the same 7 percent tax paid by people shopping in Mississippi stores.

“The people of Mississippi did not send a Republican super majority to the Legislature to raise their taxes,” said Rep. Joel Bomgar, R-Madison, referring to the three-fifths majority the Republicans garnered in both the House and Senate as a result of the 2015 state elections.

But House Ways and Means Vice Chair Trey Lamar, R-Senatobia, argued the legislation dose not impose a new tax.

Current law requires that people who purchase items online or through other remote venues, such as catalog sales or on television networks, for instance, pay the 7 percent use tax on the purchase if the retailer does not collect it.

Under current law the tax is difficult to collect. But Lamar said it is “criminal tax evasion” that people are not paying the tax when they file their state income tax returns.

Through the years many online retailers and other remote retailers have not collected the tax because of a 1992 U.S. Supreme Court ruling saying states could not force retailers to collect the tax if the business does not have a “brick and mortar” presence in the state.

Various efforts are being made to force the Supreme Court to revisit the issue by passing laws requiring them to collect the tax. In addition, online retail giant Amazon has agreed to start collecting the tax this month in Mississippi. It is also collecting the tax in other states.

Mississippi Tax Commission Chairman Herb Frierson said the hope is that other online retailers will follow Amazon’s lead. Lamar said the legislation passed Wednesday by the House, which requires the retailers to collect the tax, will help with that effort.

During the approximately one-hour of debate of the issue, Democrats, who have opposed the litany of tax cuts passed by the Republican majority in recent years, seemed to enjoy the fact the legislation was causing dissension within the ranks of the majority.

“Those of you who have to be consistent, can’t practice a little hypocrisy, vote no,” said Rep. Steve Holland, D-Plantersville. “Those of you who are day-to-day hypocrites, masked in conservatism, vote yes. We need the money.”

A recent study by the Institutions of Higher Learning University Research Center estimated collecting all the use tax owed the state could produce between $106 million and $123 million annually in new revenue at a time when the state is facing a growing need to spend more on infrastructure and cutting other budgets because of sluggish revenue collections.

The bill would send 15 percent each of the revenue to the cities and counties, and the rest would remain in the state coffers for infrastructure needs.

The bill was held on a motion to reconsider, blocking its immediate transfer to the Senate.

bobby.harrison@journalinc.com

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