Tax Ruling Costs Local Governments Thousands

JACKSON, Miss. (WCBI) — A state Supreme Court ruling means cities, counties and school districts will have to pay back hundreds of thousands of dollars.

In Lowndes County alone, the ruling will cost taxpayers more than $312,000. Almost $160,000 of that is from Columbus city schools.

In the ruling, the Supreme Court said Section 42 low-income housing should be taxed based on the amount of revenue the homes generate in rent for the developer, not on the value of the homes if they sold on the open market.

Counties across the state had been taxing them on the value method. Section 42 homes allow developers to get tax credits as incentives to build affordable housing.

The state Tax Commission could decide next week how soon local governments must repay the developers but in Lowndes County, they’ve already begun asking for their money.