Sales tax diversions in both Starkville and Columbus grew between the 2024 and 2025 fiscal years, with West Point collections down significantly in the third month of its budget cycle.
Starkville finished FY 2025 with about $10.21 million in general sales tax diversions, up about 12.47% from the previous fiscal year.
Columbus diversions for the fiscal year came in at $11.61 million, a 1.24% increase from the previous year.
Starkville’s collections exceeded what it budgeted for sales tax revenue for the fiscal year. Columbus collections fell short.
Sales tax diversions run on a three-month window. Taxes are collected by retailers in the first month, sent to Mississippi Department of Revenue the next and then disbursed to cities and counties the third. Therefore, September reported collections reflect sales from July.
Columbus
Columbus collected $11,619,514.38 in sales tax diversions this fiscal year, up 1.24% from last year’s collection of $11,476,301.80. This left the city still about $180,485.62 short of its projected sales tax budget of $11.8 million.
Jim Brigham, chief financial officer for the city, said while sales tax collections fell short of the city’s projected budget, strong ad valorem (property) tax collections would help make up the difference in overall revenue.
Sales and ad valorem taxes are the two largest sources of revenue for the city.
“We may have been a little high on the increase that we anticipated,” Brigham said, referring to the 4% growth in projected sales tax from FY 2024 to FY 2025. “I’m just not sure where people are as far as how the economy is going right now. The boom of people buying after COVID seems to be slowing down now, but I’m just glad that it’s up … compared to last year.”
Columbus is projecting 1.67% in sales tax growth for FY 2026 with a budget of $12 million.
Brigham attributed his projection to a slowed economy, citing high national interest rates and uncertainty regarding tariffs.
“That’s why I was pretty conservative in … next (fiscal) year’s budget,” Brigham said. “… It just looks like the economy has slowed down a little. Now, I might be wrong.”
Brigham said with Rural King opening this week, he still anticipates to see some growth next fiscal year.
The city collected $933,556 in sales tax diversions this month, down 7.38% from last month ($1,002,481.80). This is a 1.52% increase from September 2025 collections of $919,334.20.
Collections of the city’s restaurant and lounge tax outpaced FY 2024 collections by just more than 4%, while the city’s hotel/motel tax saw 0.53% growth.
The city collected $2,617,022.92 in restaurant and lounge tax diversions this year, up 4.03% compared to FY 2024 collections of $2,515,500.42.
This month, the restaurant and lounge tax brought in $223,625.00, a 1.3% increase compared to last month’s collections of $220,645.68. This is a 10.05% increase from September 2024 collections of $203,188.38.
The city’s hotel/motel tax brought in $469,975.51 this fiscal year, a 0.53% increase from FY 2024 collections of $467,495.39.
This month, the hotel/motel tax brought in $32,461.00, a 20.7% decrease from last month ($40,934.43). This marks a 22.59% decrease from September 2024 collections of $41,935.77.
Starkville
Starkville collected $10,214,505 in sales tax diversions this fiscal year, up from last year’s collection of $9,082,198. This exceeded the city’s projected sales tax budget of $9.73 million by about $484,505.
Budget Chair and Ward 2 Alderwoman Sandra Sistrunk attributed the excess to an audit adjustment made by the state Department of Revenue. The adjustment was reflected in June collections, when the city reported more than $1.1 million in sales tax diversions.
An audit adjustment happens when MDOR corrects a taxpayer’s return after reviewing its records.
Sistrunk said May collections were also higher than expected at more than $900,000 and could be attributed to the audit as well.
“It’s not necessarily sustainable at that same level because you see the big bump back in the middle of summer when there was an adjustment … that (DOR) said was the result of an audit,” Sistrunk said. “If you look at May and June and how they compare to similar months this year or … in prior years, it looks like there’s as much as $300,000 to $500,000 of adjustment in there. That’s one-time kind of money.”
The city budgeted FY 2026 sales tax collection at $10.3 million, still accounting for some organic growth.
The city collected $684,935 in sales tax diversions this month, down 14.57% from August’s collections of $801,781. This also marks a 3.57% decrease from September 2024 collections of $710,330.
End-of-fiscal-year collections of the city’s restaurant sales tax diversions and its tourism sales tax outpaced FY 2024 collections by just more than 4%.
Restaurant sales tax diversions assist in funding for economic development and tourism, while the tourism sales tax funds the Convention and Visitors Bureau as well as parks.
Starkville collected $3,189,369 in restaurant sales tax diversions this fiscal year, up 4.3% from FY 2024 collections of $3,057,817.
This month, the city brought in $229,179 from restaurant sales tax diversions, a 1.45% increase from August ($225,911). This marks a 3.37% increase from September 2024 ($221,713).
Starkville’s tourism tax brought in $1,825,551 this fiscal year, up 4.32% from FY 2024 collections of $1,749,929.
This month, the city collected $132,209 from tourism tax diversions, down .99% from August ($133,530). This marks a 2.31% increase from September 2024.
West Point
West Point’s budget cycle began July 1.
Three months into the fiscal year, the city has collected $626,224.57 in sales tax diversions. This marks a 16.92% decrease from this time last year ($753,837.78).
This month, the city brought in $195,009.66 in sales tax diversions, down 8.23% from last month’s collections of $212,513.07. This is a 21.89% decrease from September 2024 collections of $249,690.39.
Year-to-date, the city’s tourism tax has brought in $106,437.44, marking a 9.37% increase from this time last year ($97,314.30).
West Point collected $35,282.10 in tourism tax diversions this month, a 6.37% increase from last month ($33,168.67). This marks a 13.67% increase from September 2024 collections of $31,036.92.
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