Mississippi Municipal Revenue PartnershipFairer allocations. Reliable local services. Accountable results.
The safeguards
Fifteen questions the Partnership is asked most often, answered in the order they usually come up.
Is this a tax increase?
No. Less than a penny for the city. Not a penny more at checkout.
No. Less than a penny for the city. Not a penny more at checkout. The consumer rate and taxable base stay unchanged; the plan moves less than one additional cent of the existing covered 7-cent tax to the municipality over six years, and changes how existing sales and use taxes are allocated, verified, and reported.
Because HB 898 already directs the review, and because a larger share is only meaningful if coding and situs are correct. Step Zero ensures each municipality receives what current law already directs.
See Step Zero.
A dollar of municipal business activity to which the ordinary The share of the State sales tax the law sends back to the city where the sale happened. clause in Mississippi Code Section 27-65-75 applies. Statutory exclusions and separately treated categories are preserved.
Cities provide the services that support the commerce generating these taxes, and the arithmetic is short enough to check. Under the ordinary diversion today a municipality receives 18.5 percent of the covered 7-cent tax, which is 1.295 cents of every covered sales dollar. At the 30 percent endpoint it receives 2.100 cents, an additional 0.805 cents; the State and other statutory allocations retain 4.900 cents of the same 7-cent tax. The move is phased over six years, and the next uncompleted step pauses if adjusted General Fund collections decline. The grocery share is paired at 42.0 percent so that a municipality receives the same 2.100 cents from the 5-cent grocery rate. The consumer rate and the taxable base do not change.
The per-dollar effect is published in full: State and other statutory allocations move from 5.705 cents to 4.900 cents of the covered 7-cent dollar. The Partnership will not publish a statewide dollar figure derived from an unofficial base — that number belongs to the Department of Revenue and the Legislative Budget Office.
The State has recorded repeated annual General Fund collections above appropriations, and maintains substantial reserves. These are annual closeout measures and dedicated funds, not one accumulated unrestricted account.
See State fiscal context.
If actual adjusted General Fund collections decline year over year, the next uncompleted step pauses, completed steps are preserved, and the schedule resumes in the first growth year.
The enacted schedule reduces the rate from 4.00 percent to 3.00 percent between 2026 and 2030. Municipal services should receive the same kind of predictable planning before future revenue growth is fully committed.
Through defined use-tax flexibility inside the existing pool formula: public-safety capital uses and a capped operating allowance, with the equal-share first $3 million preserved.
Property-tax decisions remain local decisions. This plan addresses the allocation of taxes already collected at the point of sale; it makes no property-tax promise in either direction.
State programs have provided meaningful project support. They are grants and loans for specific purposes, not a recurring share of the taxes municipal commerce generates.
The ordinary diversion follows business activity, and the paired use-tax pool balances the picture: equal shares on the first $3 million and a population component in the remainder. The plan strengthens both halves.
Standardized annual reporting, common spending categories, audit or agreed-upon-procedures coverage, open-meeting votes for the operating allowance, and published methodology for every example.
See Accountability.
No promise is made about property-tax rates in either direction; those decisions remain with each governing authority. It can reduce the pressure to raise them. As more purchasing moves online, a larger, verified share of the sales and use taxes municipal commerce already generates helps cities maintain services without leaning harder on other local revenues.
Cities are first asking for a larger share of taxes already collected by the State. If State leaders prefer to authorize a local tax instead, that alternative should be evaluated openly, including its rate, base, voter or governing-authority approval process, interaction with existing diversions, and effect on taxpayers.