Mississippi Lt. Gov. Tate Reeves on Monday released a statement that H.B. 480 would not be acted on in the Senate, effectively killing the bill by not advancing it out of the Finance Committee by a February 28 legislative deadline. As previously reported, H.B. 480 would have required remote sellers with over $250,000 of sales to Mississippi customers to collect and remit the state’s use tax. The Lt. Governor was quoted in numerous local media outlets as acknowledging that the bill would violate Quill Corp. v. North Dakota, 504 U.S. 298 (1992), would have unnecessarily entangled the state in protracted and costly litigation, and would be unlikely to produce any new revenue unless and until that litigation was resolved in the state’s favor.
Left unresolved by the demise of the bill is what the state might do to fund road and bridge improvements, as the proposed legislation earmarked 70% of new use tax collections for those purposes. This funding mechanism led to widespread support for passage of the bill throughout the Mississippi business community.
While this announcement appears to doom the Legislature’s efforts to “deputize an out-of-state retailer as its collection agent for a use tax,” (see, National Bellas Hess v. Department of Revenue, 386 U.S. 753, 757 (1967)) the Department of Revenue is expected to proceed with its parallel efforts to enact an identical collection requirement via regulation. The Department has made no new pronouncements refuting its previously stated intent to act independently of the Legislature following its public hearing on the proposed regulation on February 15.
We will continue to monitor and report legislative and regulatory developments on this issue.