Quitman legislator still carrying banner for abolishing business inventory tax
State Rep. William Shirley, owner of the Family Fish Camp restaurant in Quitman, expects he’ll be doing the same thing next year he’s doing this year: continuing his lonely campaign for phasing out Mississippi’s business inventory tax.
Elected in 2011, the Republican representative for District 84 has introduced an inventory ad valorem tax phase out the last three years. As in past years, the 2014 bill specifies a 10-percent a year decline in the assessed value of business equipment through 2024, when the percentage of value assessed would be zero. His legislation, HB 9, is stuck in the House Ways & Means Committee, where Shirley expects it will perish. “Naturally, nobody wants to sign on to it,” he said, though he listed the National Federation of Independent Businesses/Mississippi as supporters.
Mississippi in 2012 gave business owners a measure of relief, enacting legislation that increases the state income tax credit for inventory taxes paid from the current $5,000 to $10,000 in 2014, to $15,000 in 2015, and in 2016 and beyond to the lesser of the amount of state income taxes owed or the amount of inventory taxes paid.
Beneficiaries of that bill were the larger businesses, leaving little benefit for the owners of small businesses whose equipment and furnishings never drop below 15 percent of their original value, Shirley contended.
“Small business owners don’t qualify in many cases,” said Shirley, whose district takes in portions of Clarke, Jasper, Lauderdale and Newton counties.
“I pay taxes on every chair and table” no matter their age, Shirley said of his restaurant. “If they’re going to charge somebody 15 percent on a chair, just throw the thing away. It never goes to zero [on depreciation],” he added. “ I’ve heard colleagues on the floor say they have desks they’ve paid for for 40 years.”
The original House-passed version of the 2012 legislation, House Bill 536, favored by the National Federation of Independent Businesses/Mississippi would have allowed a full rebate of all inventory taxes paid by use of income tax credits and actual rebates by the state.
Shirley said legislative leaders are missing an opportunity to compete for small business growth with neighboring Alabama, Tennessee and Louisiana, none of which has an inventory tax.
Local governments in Mississippi annually take in approximately $142 million in inventory tax money. The state gives back a total of $6.5 million in income tax credits.
Ron Aldridge, state director of the NFIB, said in a 2012 Mississippi Business Journal interview that the low amount of income tax credits the state gives back “ tells you real quickly that a whole lot of (small businesses) don’t have enough income tax because some of them are at break-even, whereby the credit does them no good. We see the rebate program as doing the same good that repealing the tax would, because it would end up being no cost to (businesses). Aldridge conceded in the same 2012 interview that “the money is probably not there.”
Shirley said he sees the inventory tax phase-out as more of a fairness issue than a fiscal one. “If we are going to be a pro business state, they need to help the small businesses as well,” he said.
To sign up for Mississippi Business Daily Updates, click here.
One Response to “Quitman legislator still carrying banner for abolishing business inventory tax”
Top Posts & Pages
- Analyst: KiOR Columbus plant may end up sold as scrap
- (UPDATE) Gov. Bryant: $1.2 billion aluminum plant is a very exciting proposition for the state of Mississippi
- College Board gives Keenum contract extension, raise
- Humana and Bill, Hillary and Chelsea Clinton Foundation partnering
- Six out of eight universities could have higher tuitions in 2015
- WILLOUGHBY: Bernie Reed cites hard work as key to success of Reed’s Metals
- Can Metrocenter rise from the ashes? Again
- Hunting deer? There's an app for that
- Apple ordered to pay $23.6M for using SkyTel technology
- Gulf oil rig explosion kills one worker, injures three