OPINION: Bill Would Give HOA’s Taxing Authority

A bill in the Mississippi legislature could give a homeowner’s association the right to levy property taxes on the residents that live there.

By: Steve Wilson, Investigative Editor for the Mississippi Center for Public Policy

House Bill 1612 would authorize municipalities to create special improvement assessment districts in areas administered by home owner associations.

These 501(c)(3) organizations would be authorized to levy up to 6 mills of property tax (the amount per $1,000 of assessed value of the property) to fund parks, sidewalks, streets, landscaping, lighting, fountains, security enhancements such as gates and cameras, and even the hiring of private security services.

In Mississippi, ad valorem tax is assessed at 10 percent of the value of real property.

For example, on a house with an assessed value of $250,000 in the city of Jackson, six mills of additional tax could add up to an additional $145.50 annually in property tax.

The HOA that seeks taxing authority would have to hold a public hearing with two weeks’ notice that would be advertised in a newspaper that circulates in the area.

The tax would require a referendum of the affected property owners and would require 60 percent approval by them before the district could be authorized.

The governing authority of the municipality where the district is located could dissolve it via a resolution if all activities for which the district was created were complete and no debts were outstanding in connection with the improvements.

The bill is sponsored by state Rep. Mark Baker (R-Brandon) and passed the House 93-22 on February 28 after failing to get a two-thirds majority on its first pass on the floor.

It hasn’t yet been referred to a Senate committee, but as a revenue bill, it is on a later calendar than a general bill. The deadline for floor action on appropriations and revenue bills passed out of the other chamber is March 19.

A similar bill that would only apply to HOAs in the Jackson city limits is active in the House and is similar to bills that have been killed in each of the last four legislative sessions. State Rep. Credell Calhoun (D-Jackson) is the sponsor of HB 1157, which is a local and private bill.

The old law that authorized the creation of these special improvement districts was repealed in 2001.