No disclosure of Amazon sales tax

The Mississippi Department of Revenue said it won’t give up Amazon sales tax deal records requested by the Mississippi Justice Institute because it has to protect a taxpayer.

The Mississippi Legislature already has plans for what it will do with the windfall from the internet sales tax for which a final administrative rule from the DOR is still pending.

The agency a few weeks ago filed its reply to the Mississippi Justice Institute’s complaint over a denial of its public records request. The Institute requested details and related communications on the deal the DOR reached with online retail giant Amazon, which has already started collecting the state’s 7 percent use tax on items bought by Mississippians.

The DOR says in its response that the requested documents are exempt from the state’s open records law since it has a legal duty to protect the confidentiality of a taxpayer.

The problem with that legal argument, says Mississippi Justice Institute President Mike Hurst, is that Amazon is not liable for any sales or use taxes in the Magnolia State due to the 1992 U.S. Supreme Court decision Quill vs. North Dakota. That decision requires a company to have a physical presence (known as a nexus) such as a warehouse or office in a state before it can be compelled to collect sales tax.

Taxpayers are supposed to pay a 7 percent “consumer use tax” individually on all purchases from out-of-state firms, which also is the same rate as the state’s sales tax. The key difference between the use tax and the sales tax is that municipalities and counties receive a chunk of the revenue from the sales tax, while all of the proceeds from the use tax go to the state’s general fund.

Mississippi Watchdog also requested terms of the state’s deal with Amazon and was rejected by the DOR.

The Legislature is already planning how it will spend the windfall from the Amazon tax deal.

While House Bill 480, which would have instituted an internet sales tax, died in the Senate Finance Committee, the idea persists in an amendment to Senate Bill 2939, approved by the House last week. That bill would allow counties to enter into fee-in-lieu contracts to reduce the property tax paid by industrial projects costing $60 million or more.

The amendment to S.B. 2939 by state Rep. Trey Lamar, R-Senatobia, would direct revenue from the use tax to fund repair, maintenance and “reconstruction” of roads and bridges. The amendment says that it would redirect the revenue from “voluntary taxpayers” that don’t have a physical nexus in the state, such as Amazon.

It would also go into effect if the Quill decision is overturned or the U.S. Congress passes an internet sales law.

The proceeds would be divided up as follows:

• 60 percent would go to the Mississippi Department of Transportation.

• 25 percent would go to the counties.

• 15 percent would go to municipalities.

The bill is being held over in the House on a motion to reconsider and will have to approved by the House by Thursday’s deadline for disposing of motions to reconsider on revenue and appropriation bills.

 

Steve Wilson reports for Mississippi Watchdog. Contact him at swilson@watchdog.org and on Twitter.