Senate Bill 2785 - Mississippi Optional Sales Tax Act

• Municipalities may impose a special sales tax of up to 1% on gross proceeds of sales or business income taxed at 7% or more under Mississippi sales tax law, subject to approval by at least 3/5 of voters in a referendum.

• Counties may impose a special sales tax of up to 1% on sales outside municipal corporate boundaries (Section 2) or countywide including municipalities (Sections 3 and 4), each requiring 3/5 voter approval and municipal/county agreement where applicable.

• Revenue from special sales taxes must be placed in separate funds and used exclusively to fund and retire debt for capital projects including recreational complexes, senior centers, libraries, water/sewage systems, major streets, and multipurpose buildings.

• Municipalities and counties may incur indebtedness supported by special sales tax revenue without counting against statutory debt limitations, with the tax discontinuing when debt service and project obligations are fully paid.

• Department of Revenue collects the special sales taxes, retains 3% for administrative costs, and remits proceeds to the collecting municipality or county by the 15th of the following month; special sales tax authority is excluded from municipal and county bonded indebtedness limits.