July 6, 2017 10:41:18 AM
JACKSON -- Months after Mississippi's top tax official proposed requiring large online sellers to collect taxes on internet sales, he still hasn't enacted the rule.
Revenue Commissioner Herb Frierson is still considering the proposal, spokeswoman Kathy Waterbury said Wednesday.
"The reason the rule remains under consideration is that we're working on getting it right," Waterbury told The Associated Press.
Frierson has acknowledged that the rule would directly challenge U.S. Supreme Court rulings forbidding states from requiring tax collections by companies without in-state locations. He has said the move aims to spark court reconsideration of past rulings. Alabama, Tennessee, South Dakota, Massachusetts, Vermont and Wyoming have all pursued challenges against the 1992 U.S. Supreme Court decision that rejected tax collection by retailers with no in-state presence.
The rule could have been enacted as early as March, following a February hearing where opponents questioned whether Frierson had the power to make a rule contradicting federal law.
"It's still sort of in limbo," said John Fletcher, a tax lawyer who has questioned the rule. "I'm just assuming they're still considering whether to move forward with it and how to do it."
On Feb. 1, Amazon.com started collecting use taxes voluntarily in Mississippi, an amount that could be worth $15 million to $30 million a year. That came weeks after the Revenue Department proposed a rule requiring every retailer with more than $250,000 in yearly sales to collect taxes on behalf of Mississippi.
Right now, individuals and companies that make purchases from out-of-state sellers are required to pay the 7 percent use tax, which parallels the sales tax that in-state retailers are supposed to collect.
Officials said in February that Mississippi could be missing out on as much as $100 million or $150 million a year in revenue.
While businesses often pay for purchases, individuals typically do not. The department said in February that consumers paid only $250,000 in 2016 when they filled out their state income tax forms. Mississippi lawmakers this year failed to write parallel language into state law after Lt. Gov. Tate Reeves blocked the legislation, saying it was unconstitutional.
Still, Waterbury said about 20 other retailers besides Seattle-based Amazon had signed up to collect taxes voluntarily for Mississippi. She said she couldn't disclose their names because of taxpayer privacy laws. Waterbury said officials weren't immediately able to estimate how much money the voluntary collectors had paid to Mississippi.
Some conservative groups have fought the move as a tax increase.
Forest Thigpen, President of the conservative-leaning Mississippi Center for Public Policy, said tax officials should have issued an economic impact statement for the proposed change. State law calls for such an analysis to be issued when the cost of complying with a rule is more than $100,000. A unit of the center is suing the Revenue Department in Hinds County Chancery Court, seeking records related to the agreement made by the department Amazon.
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