Mississippi Municipal Revenue Modernization Plan
Mississippi cities provide the services that make communities and commerce work. The revenue system has not kept pace.
Cities maintain streets, drainage, public safety, utilities, parks, and other essential infrastructure. Yet municipalities currently receive only 1.295 cents of the 7-cent tax on ordinary covered sales within their boundaries.
The Partnership proposes a six-year plan that slowly adds up to still less than one additional penny per dollar for the city, without raising any taxes. The rate paid at checkout stays exactly the same, and the plan pauses in any year State collections decline.
To be plain about it: nobody’s taxes go up, and nobody is being asked to raise them. Cities are asking the State for less than one cent more per dollar, out of the seven cents the State already collects, because that is what’s fair.
And fairness gets more urgent every year: shopping keeps moving online, and when it does, the tax follows it. The State keeps the largest share of the tax on online sales; cities receive only a small distribution back. So cities are asking for two things: a fairer share of the tax on in-person sales, and more freedom in how they use the small online share they already receive.
Why this matters
In the states next door, cities keep far more of the sales tax collected at their own stores than Mississippi cities do.
The State collects the sales tax at every register, and the Legislature decides how much of it goes back to the city where the sale happened. That share has a name in the law: the ordinary municipal The share of the State sales tax the law sends back to the city where the sale happened.. Today a city receives 18.5 percent of the 7-cent tax on ordinary covered sales, the everyday purchases taxed at the full 7 percent. That works out to 1.295 cents of every taxed dollar; the State keeps the rest.
Mississippi cities depend on a state-set diversion; nearby cities can have direct municipal sales-tax revenue. That is the handicap.
What reaches the city treasury
| City | City-only rate | City revenue from $10 million in comparable taxable sales |
|---|---|---|
| Gulfport, Mississippi | 1.295% | $129,500 |
| Gulf Shores, Alabama | 3.000% | $300,000 |
| Slidell, Louisiana | 2.380% | $238,000 |
| Mobile, Alabama | 5.000% | $500,000 |
Gulfport, Mississippi
- City-only rate
- 1.295%
- City revenue from $10 million in comparable taxable sales
- $129,500
Gulf Shores, Alabama
- City-only rate
- 3.000%
- City revenue from $10 million in comparable taxable sales
- $300,000
Slidell, Louisiana
- City-only rate
- 2.380%
- City revenue from $10 million in comparable taxable sales
- $238,000
Mobile, Alabama
- City-only rate
- 5.000%
- City revenue from $10 million in comparable taxable sales
- $500,000
- Source
- City rates: City of Gulf Shores published rate breakdown (4% state, 3% Baldwin County, 3% City), Alabama Department of Revenue rate materials, and the Louisiana Association of Tax Administrators parish index (Slidell city portion, effective January 1, 2026); Gulfport figure is the statutory diversion share under Miss. Code § 27-65-75.
- Retrieved
- Definition
- This is a rate illustration, not an estimate of either city's actual collections. Tax bases and exemptions differ. County and other local-government taxes are excluded.
Download this table as CSV — City-only sales-tax revenue on $10 million in comparable taxable sales
On the same $10 million in broadly comparable taxable sales, Gulfport receives about $129,500 under Mississippi’s current statutory diversion. Gulf Shores receives $300,000 for its city government, Slidell receives $238,000 for its city government, and Mobile receives $500,000 for its city government. County and other local-government taxes are excluded from this comparison.
Mississippi cities provide the same police protection, fire protection, streets, drainage, utilities, code enforcement, parks, and infrastructure as peer cities across the state line. Those peer cities generally receive far more of the sales-tax revenue that local commerce generates. In Mississippi, the city’s share is set in State law. When municipal costs rise, Mississippi cities have fewer recurring revenue tools and less access to the revenue created in their own communities.
This is a structural policy difference, not an accusation of poor municipal management and not a demand for taxing authority.
What that difference means for Mississippi cities
- Greater dependence on property taxes and fees
- Greater pressure to defer streets, drainage, public-safety equipment, facilities, and maintenance
- Less room to absorb rising costs: retirement contributions (PERS), insurance, materials, fuel, utilities, labor, and construction
- Less ability to keep up as shopping moves from local stores to online
- A competitive disadvantage when recruiting residents, businesses, employees, and development against municipalities across state lines
- Few steady sources of money, even though city services keep the businesses running that produce the State's sales tax
Why now
Municipal costs continue rising.
Public safety, streets, drainage, utilities, construction, insurance, equipment, and contributions to PERS, the state retirement system, all cost more than they did when the municipal share was set.
The PERS employer rate is 18.90 percent effective July 1, 2026, with remaining statutory steps to 19.40 percent in 2027 and 19.90 percent in 2028.
State tax policy is already on a published schedule.
Municipal services would benefit from the same kind of long-range planning before future State revenue growth is fully committed.
Mississippi enacted an individual income-tax reduction from 4.00 percent in 2026 to 3.00 percent in 2030.
Commerce has changed.
When you buy in a store, part of the tax comes back to the city where you bought it. When you buy online, it mostly does not; the State keeps most of that tax and sends cities a small share. And online sales are growing at more than eight times the rate of in-person sales. Nobody is asking shoppers not to change with the times. Cities are asking the State to change with them. Small towns feel the shift most, and they need more freedom in how they spend the share they already receive.
What the Partnership asks the State to do
The Legislature began the allocation review through House Bill 898. The Partnership asks the Legislature to finish it: confirm that every sale is credited to the right city; raise the city’s share from 18.5 percent to 30.0 percent over six years; set the paired grocery share at 42.0 percent so the city receives the same amount either way; update what cities may spend existing use-tax money on, including public-safety equipment and small-town needs; and require every city to report its spending the same way.
The complete package
- Check that every sale is credited to the city where it happened, and set clear rules for reporting and settling disputes.
- Move eight-tenths of one cent to the city over six years, out of the seven cents the State already collects. Nothing is added to the seven cents.
- Set the grocery share to match, so the city receives the same 2.100 cents from groceries as from any other sale. The grocery tax rate itself does not change.
- Update the list of things cities may spend their existing online-sales money on, including police and fire equipment.
- Require standardized municipal reporting and accountability.
- Pause the next uncompleted step if adjusted General Fund collections decline.
Read the Six-Year Schedule · Step Zero: verify the allocation · Accountability
What taxpayers pay
Less than a penny for the city. Not one penny more for taxpayers.
The rate you pay does not change. The list of things that get taxed does not change. Over six years, 0.805 cents of the 7 cents the State already collects is sent back to the city instead of kept by the State.
Today
1.295 cents
to the municipality
At the endpoint
2.100 cents
to the municipality
These are cents out of each taxed dollar. When the six years are done, the State and other required uses still keep 4.900 cents of the 7 cents.
ProjectionProposal figures
The four questions
What happens first?
The State checks that sales-tax money is being credited to the right city, and fixes it where it is not.
What changes next?
The municipal share rises from 18.5 percent to 30.0 percent over six years.
What stays the same?
The rate you pay at the register, and the list of things that get taxed.
How are small towns included?
Small towns get more freedom in how they spend the online-sales money they already receive. The formula that divides it does not change.
Local effect, and how to take part
Municipal Impact Calculator
Put in your city's own budget numbers and see what the schedule would mean. Everything stays on your device; nothing is sent to us.
Gulfport illustration
What the schedule would have meant for one real city, worked straight from Gulfport's published budget.
Small towns and online commerce
How online-sales money reaches small towns that lost the stores they used to have.
Member directory
The individuals and municipalities on the public record of support.
Model resolution
The resolution a governing authority adopts to become a Member Municipality.
Join and submit a resolution
Membership is nonfinancial. Individuals sign the statement of support; municipalities adopt a resolution in an open meeting.
What to do next
City officials
Join the Mississippi Municipal Revenue Partnership and ask your governing authority to adopt the model resolution.
Public
House Bill 898 created a committee to study how sales-tax money is split.
Ask the HB 898 committee to recommend the complete 2027 package.
Objections and frequently asked questions
Residents and businesses
Ask State leaders to verify the allocation and return a larger, accountable share of existing sales and use taxes to the cities providing the services that support commerce.