Data: Raising accelerated tax threshold would have little financial impact on state
The latest issue of the Mississippi Business Journal has a story about the push to raise the liability threshold that requires small businesses to participate in the accelerated tax payment system.
Simply put, small businesses with a monthly average of at least $20,000 in tax liability have to pay a portion of June sales and use taxes no later than June 25.
Normally, those tax payments are due on the 20th of the next month. For example, April taxes are due no later than May 20. The accelerated system forces small businesses that qualify to pay two months’ (May and June) worth of taxes on one day.
Ron Aldridge of the Mississippi NFIB, which is advocating the proposal to raise the threshold from $20,000 to $50,000, provided some data from the Department of Revenue that sheds light on how many small businesses are triggered by the $20,000 threshold, and how many would be triggered by the $50,000 threshold. The data arrived after the MBJ’s press deadline last week, and did not make the print version.
As of Oct. 26 2012, 2,623 businesses qualified under the $20,000 threshold, and paid $157.9 million in sales and use taxes. Of those businesses, 853 would still have to pay accelerated sales and use taxes if the threshold increased to $50,000. Of the $157.9 million total, those businesses paid $123.1 million, about 67 percent of the total.
The NFIB, in a press release that accompanied the data, said the state having to wait a month for $34.8 million is not enough to justify keeping the threshold at $20,000.
Four bills that address the issue have been filed and sit either in the House Ways and Means Committee or in the Senate Finance Committee. Gov. Phil Bryant made raising the threshold part of his executive budget recommendation late last year, so it’s likely at least one will be sent to the floor for debate before the first committee deadline Feb. 5.