State Lawmakers Discuss Why 2% Restaurant Tax Died

COLUMBUS, Miss. (WCBI)- The two percent restaurant tax in Columbus and Lowndes County will expire July first, resulting in a nearly two million dollar loss.

“We do not have a problem with the 2 percent tax, we just wanted to renew it as is,” said District 39 State Representative Jeff Smith.

Smith said for more than three decades the restaurant tax has always included a sales floor, and he believes it should remain that way.

“When this thing was first passed it was a decision of the then legislature not to require small businesses or small restaurants to have to pay this tax,” said Smith. “To take that out I felt like we would not be correct or would not be adequate unless there was a referendum or if it was renewed as we have done five times, just leave the threshold in as was requested.”

Smith said he and fellow House member Gary Chism requested the city and county to implement a referendum or add the $325,000 floor back to their proposal.

However, the resolutions passed by both the Columbus City Council and the Lowndes County Board of Supervisors removed the floor, meaning the tax would be collected essentially from all restaurants.

“We know that you are raising the taxes on any restaurant that has gross sales less than $325,000,” said District 37 State Representative Gary Chism. “You are raising your taxes. We republicans don’t raise taxes.”

The death of the bill means the loss of millions of dollars a year, dollars that many entities were counting on.

However, the District 39 Representative believes there are ways to make up for all of the money being lost.

“We’ve talked with MDA, if there is any short term funded needed, I think we can find that money,” Smith explained. “I just don’t want people to panic, I don’t want people to listen to the rhetoric and wringing their hands. This is not the end of the world. We are going to come back and be able to repair this, but we told everyone as a legislature that threshold had to be in the bill. We sent it to the Senate with it in the bill and it was not passed through the Senate.

Chism said the city was in favor of including the floor in their plan, so during the 2019 session, the house members are expecting to take up another resolution, this time with only one of the entities.

“We are going to be able to renew this tax,” Smith expressed. “We’re going to probably have a referendum in it, it will be for the city only and not for the county.”

With this bill not being passed, the Golden Triangle Development Link will also lose $250,00 a year that was included in the proposal.