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Tax study group releases draft of proposed changes

By EMILY WAGSTER PETTUS

Associated Press Writer

JACKSON, Miss. (AP) - A commission appointed by Gov. Haley

Barbour has released a preliminary draft of recommended changes to

the state tax structure - a test balloon, of sorts, before the

group puts its list in final form and sends it to the Capitol.

Only legislators can vote to change taxes.

The list released Friday includes some politically sensitive

items such as a suggestion that the state start collecting sales

taxes on items that are now exempt, such as newspapers and

commercial fishing boats.

Barbour said the commission is set to meet next week to discuss

the draft report. The public meeting is 10 a.m.-2 p.m. at the

Sparkman Auditorium at the state Agriculture Museum in Jackson.

The commission is scheduled to release a firm set of

recommendations by the end of the month.

In its report Friday, the commission said it has considered

several options to increase Mississippi's cigarette excise tax,

which at 18 cents is one of the lowest in the nation.

The draft did not recommend a specific tobacco tax increase, but

said the commission had received two proposals. One was to set the

tax at 36 cents a pack - the average of 10 southern states. Another

recommendation was to set the tax at 50 cents a pack - the average

of the four surrounding states.

The draft report says Mississippi should cut franchise and

inventory taxes.

"The Commission believes that growth and job creation must be a

primary focus for any recommended changes to the existing tax

structure," the report said.

Barbour, a Republican, appointed about 30 business people,

professors, economists and state and local officials to the

commission several months ago. The group has met several times to

examine tax trends in Mississippi and other states.

Barbour said Friday that the commission's goal was "making the

system more fair and equitable for our taxpayers."

The commission says Mississippi could "reduce the tax burden"

by changing the standard deduction and personal exemptions for

personal income taxes. For example, the existing standard deduction

for a married couple filing jointly is $4,600; the group says that

could go to $6,000. The existing personal exemption for married

couples filed jointly is $12,000; the group says that could go to

$14,000.

Mississippi collects a 7 percent sales tax on most items,

including groceries and clothing. The state does not allow local

sales taxes. The commission's report said that the neighboring

states of Louisiana, Arkansas and Tennessee allow local sales

taxes, making the total sales tax rates higher in each of those

places than in Mississippi.

The commission says Mississippi should consider allowing

municipalities to set local sales taxes for specific projects, if

at least 60 percent of local voters approve.

State Democratic Party Chairman Jamie Franks said it's

"offensive" that a sales tax cut on groceries wasn't recommended.

"Something simply isn't right when the nation's poorest state

continues to charge a 7 percent sales tax on groceries," Franks

said in a statement. "This is an unnecessary burden to place on

people, some of whom simply can't afford to pay the tax especially

when gasoline sells for $3.50 and $4 a gallon."

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On the Net:

Draft of commission's tax report:

www.governorbarbour.com/taxstudycommission.htm.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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