Thursday, April 23, 2009
Collector urges support of tag credit
By SUE WATSON
Marshall County Tax Collector Betty Byrd urged the board of supervisors to press its association to urge the Legislature to find the money to continue the tag credit fund.
If the state fails to find financing for the tag credit, which pays about half the cost of motor vehicle licenses for Mississippians, residents will face paying about double the amount they normally pay for vehicle registration stickers, or new tags, she said.
The State Tax Commission is in arrears to counties by more than $7 million in reimbursements and the fund could be in the red by about $33 million if the Legislature and the governor do fund the tag reduction fund this session, she said.
As it is, Byrd has been told her office will get about 30 percent of the $180,000 the state tag reduction fund owes Marshall County in April, she said. The county is reimbursed about $1.3 million from the tag reduction fund annually, which residents would otherwise have to pay collectively on their tag fees. The tag taxes are revenues divided among the county, municipal governments and school districts and are essential operating monies for these public entities.
“I am asking the board to call their legislators,” Byrd said. “They’ve got to find a way to fund this because people are going to have a hard time if they don’t find the money.”
The Legislature this session produced bills in both houses that would replenish the legislative tag fund with a tax on cigarettes. The funding shortfall was created by the recession that resulted in fewer car sales and a resultant decrease in the sales tax on vehicles that went to pay for the tag credit.
Byrd said the Legislature raised the sales tax on car sales from 3 percent to 5 percent by state statute that passed in 1994 and went into effect in 1995.
“That two percent went into the tag fund,” Byrd said. “Car sales are down and the fund is broke, so we are using the current months collections to pay the county, and school districts.”
Byrd said she believes the state tax commission will eventually pay what it is in arrears to counties through the end of June.
“But it could revert back to the taxpayer and there would be folks not renewing tags,” she said. “It would take a lot of tickets. Maybe the supervisors could get their association behind it.”
The newer the vehicle, the more money the state chips in on the tag fees, she said.
The amount that the Legislative tag credit pays on a registration sticker is shown in the upper right hand corner of the notice of tag renewal from the collectors office. That figure would be the amount the vehicle owner would have to pay if the tag fund is not restored with new sources of revenue.
In a move to put pressure on the Legislators to resolve the shortfall in revenue with another stream of money, the State Tax Commission voted Tuesday last week to reduce the amount of money it sends to counties to lower costs of tags for motorists. The tax commission decision lowered the amount it returns to counties from 5.5 percent to 3 percent. That means drivers will be paying more for their car tags.
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