Restaurants could get tax relief on alcohol purchases

Restaurants could get tax relief on alcohol purchases

HATTIESBURG, MS (WDAM) - A bill that has made its way through the Mississippi Senate would give a tax relief to restaurants but would take money away from the state's general fund.

Senate Bill 2207, authored by Tourism Committee Chairwoman Senator Lydia Chassaniol (R- Dist. 14), would eliminate the state's half of the additional privilege fee (APF) they receive from a $450 tax on every $5,000 of alcohol purchased from the state.

"It's an unfair tax against restaurants," said Chassaniol, of the tax that has been in place since at least the late 1960s.

The other half of the APF goes to the city or county of the purchasing restaurant, and that would be maintained if SB 2207 was signed into law.

"It's a business-friendly effort that will help the restaurant industry," explained Chassaniol, who is a former restaurant owner, although her restaurant did not have a bar.

Executive director of the Mississippi Hospitality and Restaurant Association Mike Cashion said restaurants spend an average of $4,000 each year in APFs. If the bill took effect, half of that would stay with the restaurant, and Cashion said his surveys of folks in the association showed they already knew what they would do with the extra money.

"Over 48 percent said they would give employees raises," he explained, stating that an additional 32 percent would purchase or upgrade equipment.

The state received $1,760,650 from their half of the tax in 2014, according to Kathy Waterbury of the state Department of Revenue. When asked how the state felt about losing that money that is a part of the $7 billion general fund, she said, "it's a policy decision for the legislature to make."

Hattiesburg Chief Financial Officer Sharon Waits said the Hub City budgeted $150,000 last year for revenue from the alcohol tax, which is part of the city's $54 million general fund.

"This is a way for folks to reinvest back into their business," said Cashion, "reinvest back into their employees, and ultimately, grow their business."

SB 2207 has been sent to the House of Representatives for further consideration.