While scrambling for additional revenue to fund Medicaid, improve public education, build highways, pay for prisons and provide a host of other necessary government functions, the Mississippi Legislature is leaving sales tax money on the table.
Americans spend over $136 billion annually on online purchases. One of the reasons those sales are growing is that they allow the buyer to avoid paying state sales taxes. Forty-six states – including Mississippi – impose either sales or use taxes on the sale or lease of certain types of merchandise.
If a Mississippi customer visits a local mom-and-pop hardware store or a corporate giant like Wal-Mart, the 7 percent Mississippi sales tax is added to the purchase of almost every item except a relatively small but complex list of tax-exempt items as diverse as prescription drugs, coffins and Girl Scout cookies.
Even if a Mississippi customer buys a product on the Web from a business that has both an actual store location in the state and a Web site, the state sales tax is collected.
But if an Internet customer goes online to purchase the same item available at the local mom-and-pop store or at a chain store like Wal-Mart from a Web site with no actual physical location in the state, no sales tax is collected on that purchase.