Small towns and online commerce

Every town gets the same share increase, big or small. The schedule works the same way on each city's own covered sales dollars. The added use-tax freedom applies to every town too. Most Mississippi municipalities are small towns, and two features matter most to them: the pool's first $3 million is distributed in equal shares, and the new flexibility covers the public-safety assets small budgets struggle to fund. The formula itself is not replaced, and no local tax is proposed.

How the pool works today

  • The first $3 million is distributed in equal shares.
  • The rest is divided by population and by each town's past sales-tax diversion.
  • The money is not tracked package by package. It is not divided by where each online order gets delivered.

Actual

Reported figure from an official published record.

A description of the distribution rules in current law. Not a proposal and not a projection.

Source
Municipal use-tax pool distribution rules. Published by Mississippi Code.

Proposed defined changes: for every municipality

  • Add police and fire facilities, vehicles, apparatus, emergency communications, radio systems, cybersecurity, related technology, and related debt service to eligible capital uses.
  • Permit no more than 25 percent of a municipality's annual distribution for documented maintenance and operating costs of eligible infrastructure and public-safety assets.
  • Continue to exclude unrelated administration, general payroll, and benefits.
  • Require an open-meeting governing-authority vote to use the operating allowance.

Projection

Forward-looking figure under stated assumptions. Not a reported or derived actual.

Proposal figures and proposal language. Not enacted law, and not a change to how the pool is divided among municipalities.

Source
Proposed defined use-tax changes. Published by Mississippi Municipal Revenue Partnership proposal, August 2026.
As of

Expanding eligible uses in increments

Adding to the list of allowed uses a step at a time is ordinary legislative practice. It is what the Partnership asks for here: a defined set of new uses, a capped operating allowance, and an open-meeting vote before a town uses that allowance.

The Legislature has already taken an incremental step of exactly this kind. House Bill 1386 of the 2026 Regular Session (Chapter 377, Laws of 2026, effective July 1, 2026) amended Mississippi Code Section 27-67-35 to authorize municipalities to use these distributions for sidewalk repair, maintenance, and reconstruction. The Partnership's proposal extends that same defined-use approach to public-safety assets.

Questions from a small town

Clerks and governing authorities are welcome to use the secure contact form, or to read the accountability commitments that accompany the request.