City of Pascagoula; extend tourism tax levied on prepared food sold at restaurants.
Summary
House Bill 1654 extends the sunset date for an existing local law that allows the City of Pascagoula to levy a special tax on the gross proceeds from prepared food sold by restaurants in the city. The bill changes the repeal date from July 1, 2025, to July 1, 2029, thereby continuing the city’s authority to impose the tax for several more years.
The revenue from the tax is dedicated to implementing Pascagoula’s Comprehensive Parks and Recreation Master Plan, rather than to the city’s general fund. The bill preserves the existing structure of the tax: the rate may not exceed 2 percent, the city must adopt a resolution and hold a referendum before imposing it, at least 60 percent of voting electors must approve, and the tax is administered and collected through the Mississippi Department of Revenue under state sales tax procedures. The bill also maintains separate accounting and annual independent audit requirements for the funds generated by the tax.
Impact
HB1654 does not create a new tax authority; it extends an existing local and private law specific to Pascagoula. Its practical effect is to continue the city’s ability to levy a dedicated restaurant/food tax for parks and recreation projects through July 1, 2029, while leaving the tax rate cap, referendum requirement, collection method, and spending restrictions unchanged. The bill affects Pascagoula restaurants, consumers purchasing prepared food, and the city’s parks and recreation funding stream.
Sentiment
The bill appears to have broad support and little visible opposition. It passed the House 108-4 and the Senate 50-1, indicating strong bipartisan approval for extending the local tax authority. The lack of committee transcript discussion suggests the measure was relatively straightforward and noncontroversial in legislative proceedings.
Contention
The main policy issue is the continued use of a local restaurant tax to fund a specific municipal master plan, which can raise concerns about the burden on restaurants and consumers. However, the bill retains voter approval safeguards, including a referendum and a 60 percent threshold, which likely reduced opposition. Any disagreement would most likely center on whether the tax should continue and whether dedicated tourism/parks funding should remain tied to prepared food sales rather than general revenues.