State officials were still determining last week whether lottery tickets sold in the capital city would be assessed a special one-percent infrastructure sales tax.
“That is a million-dollar question – something our attorneys and experts in sales tax are looking at now,” said Kathy Waterbury, spokeswoman for the Mississippi Department of Revenue (DOR). Waterbury is unsure when a decision would be made.
Jackson city is on tap to receive millions of new dollars in funding, following the passage of two major bills during the recent legislative special session.
Mississippi lawmakers approved two measures, one that would divert a portion of the state’s Internet sales tax revenues to the cities and one that would allow for the creation of a state lottery.
Mayor Chokwe Antar Lumumba said at a recent press conference the Internet tax diversions would translate $4.3 million, which would be paid to the city in equal amounts over the next four years.
He estimated that an additional $4 million in revenue would be generated by the lottery, and that any lottery tickets sold in the city would be eligible for the one-percent infrastructure sales tax.
The tax went into effect in 2014, after Jackson voters overwhelmingly approved it. Under the law, an additional one-percent assessment is placed on certain sales transactions in the city limits, excluding food purchases, food and beverage purchases at restaurants, hotel and motel room rentals, medicine, medical equipment purchase, home medical supplies and cable television subscription services.
The law was passed prior to the passage of lottery legislation, so lottery tickets are not mentioned in state statute.
The Alyce G. Clarke Mississippi Lottery Law went into effect on September 1. The law establishes a board of directors to govern the lottery and establish rules to govern it.
The law, though, does not spell out whether tickets will be subject to a sales tax. Among questions that must be answered are whether the sale of the ticket would be considered the sale of property, which is the subject of sales tax, or whether it is simply evidence of a bet and would be subject to an amusement tax.
Sales tax in Mississippi is seven percent. Under Mississippi code, amusement taxes range from three percent to seven percent, and are assessed on the sale of tickets to events like concerts and college football games.
If the tickets are subject to the traditional sales tax, Waterbury said ticket sales in Jackson would likely be subject to the infrastructure tax.
Said Waterbury, “That’s why we’re studying the law, to see if it fits into the tax code.”
ts will be assessed infrastructure sales tax