Mississippi House Approves Tax Credits To Offset Inventory TaxesBy Jeffrey Hess | Published 27 Mar 2012 04:48pm |
Mississippi's 230-thousand businesses could be getting a big tax break under a bill approved by the Mississippi House. MPB's Jeffrey Hess reports that the bill could greatly reduce Mississippi's inventory tax.
Mississippi is one of just nine states that taxes raw materials, unfinished goods, and unsold products of businesses in the state.
Ron Aldridge with the Nation Federation of Independent Businesses says that tax is unfair and put's the state businesses at a disadvantage.
"What happens with a lot of small businesses is they don't sell it each year. So you continuously have a tax on top of a tax on top of a tax. And some items in some old country stores you can go through in Mississippi have been taxed for twenty or thirty years sitting on the shelf," Aldridge said.
Under a bill approved by the House, the state would give businesses a tax credit for the inventory taxes...which are funds paid to local governments.
House ways and Means committee chairman Jeff Smith of Columbus argued on the floor that having the state issue tax credits means local communities would still get the revenue they rely on.
"I am so tired of the public officials across this state saying this is going to hurt the cities and counties. It’s not. This is not going to hurt your boards. This is not going to hurt your cities. It is going to be a drain on the general fund but at the end of the day it is going to make Mississippi a much more business friendly atmosphere," Smith said.
Smith says the credits to businesses will grow in size until 2019 when they could cost the state as much as 120-million dollars a year.
It’s that cost that Representative Percy Watson pointed to before voting against the bill.
"We were just so concerned about the impact it would have on the general fund with the general fund having all the challenges it is now, it would appear like we are spending money before it is received," Watson said.
Supporters of the tax change argue that the lower taxes will draw more businesses to the state and offset the drain on the general fund.
This House bill now moves to the state senate where a companion piece of legislation is also being considered.
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