Despite repeated attempts by Mississippi government officials, the state’s internet sales tax revenue for FY 2017 was down even more than sales tax revenue- $4.2 million or 1.8 percent compared to the sales tax being down 0.33 percent.
The 7 percent sales tax is collected by Mississippi retailers on most items and remitted to the state. The 7 percent use tax is collected on remote or out-of state sales. The out of state retailers are not required to collect the tax on their sales to Mississippians.
While state law mandates that purchasers pay the 7 percent use tax if it is not collected by the retailer, few do. And at the same time, many fear that the drop in the sales tax is related to the fact more people are shopping online.
Many state officials are hoping the fact that internet retail giant Amazon and others started voluntarily collecting the use tax for the state will help make up for any loss in sales tax revenue.
July collections indicate that might be occurring. But for the just completed fiscal year, ending June 30, use tax revenue was down even more than sales tax revenue – $4.2 million or 1.8 percent compared to the sales tax being down 0.33 percent.
Of the internet or use tax collections, (State Economist Darren) Webb said, “Certainly it is a growing issue and it does diminish sales tax collections, but it isn’t more of a problem in Mississippi than in other states.
“In fact given our lower (internet) connectivity, it is probably less problematic here. Sales tax has performed better in some of the other states than in Mississippi. As I understand, the Amazon money is coming in about as expected. But that is not a lot of money in the grand scheme.”