The voluntary collection of the 7 percent tax on retail items sold to Mississippians by Amazon and other online retailers is not providing the boost to the state general fund that many had hoped it would.
Instead of being a boost to the beleaguered state general fund, the use tax, like other state taxes, is underperforming in terms of collection. Through the month of May, the state’s use tax revenue is actually down – albeit only slightly – from the previous year by $901,491 or 0.44 percent.
When state Revenue Commissioner Herb Frierson confirmed in January his agency had reached agreement with online retail giant Amazon to collect the use tax, there was hope that it would mean a boon – at least a small one – for sluggish state revenue collections.
And use tax collections from March seemed to justify reasons for that hope. In March, the state collected $20 million in use tax – up 8.9 percent from the amount collected in March 2016.
But use tax collections have been sluggish in April and May. In May, the state collected $17.4 million in use tax, compared to $18.9 million in May 2016.