Legislature Approves Tax Credit To Offset The Inventory TaxBy Jeffrey Hess | Published 30 Apr 2012 08:01pm |
Mississippi law makers have approved a big tax break for businesses in the state. MPB's Jeffrey Hess reports law makers want to offer tax credits to off set what is known as the inventory tax.
The bill is on its way to the Governor's desk after a vote in the Senate yesterday.
The plan is to offer businesses credits on their state income tax to offset the tax they pay on their raw materials and finished and unfinished goods in their store.
Finance Committee Chairman Senator Joey Fillingane of Sumrall brought the bill to the floor.
He told Senators that the inventory tax is unfair and stifles economic growth.
"You have already paid sales tax on it once. And then once a year the taxmen are going to come around and they are going to look to see everything in your place of business and then they are going to tax on this inventory tax once again. It is the most senseless and unfair tax that we probably have on our books in the state of Mississippi. Which is probably why 41 other states have done away with it," Fillingane said.
The credits will be phased in over time but when fully implemented could cost the state as much as 120-million dollars a year.
It is set up as state tax credits because the inventory tax is actually paid to local communities who rely on that revenue.
Opponents of the measure, like Senator Hob Bryan, attacked the cost of the credits.
"How can we tell our schools 'just hang in there one more year the worst is over it is getting better' when we are giving all this revenue away? How is it that we can tell our community colleges, our universities, our college students who are having to pay more and more tuition 'we are sorry we are just doing the best we can, but we have enough money for this'," Bryan said.
Bryan also says the credits are unfair because it requires tax payers to pay for the credits even if there isn't substantial industry in their area that would benefit from the cut.
The Senate approved the bill 39-to-8 and it had previously passed the house this weekend.
If approved by the Governor, the bill would take effect this year on July first this year.
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