Small towns and online commerce

Every municipality, small or large, receives the same share increase under the schedule — it applies identically to each city's own covered sales dollars — and the proposed use-tax flexibility applies to every municipality's distribution too. All but a handful of Mississippi's municipalities are small towns, and two features matter most to them: the pool's first $3 million is distributed in equal shares, and the new flexibility covers the public-safety assets small budgets struggle to fund. The formula itself is not replaced, and no local tax is proposed.

How the pool works today

  • The first $3 million is distributed in equal shares.
  • The remainder uses population and prior sales-diversion components.
  • The pool is not destination sourcing and is not presented as following each delivery into a municipality.

Actual

Reported figure from an official published record.

A description of the distribution rules in current law. Not a proposal and not a projection.

Source
Municipal use-tax pool distribution rules. Published by Mississippi Code.

Proposed defined changes — for every municipality

  • Add police and fire facilities, vehicles, apparatus, emergency communications, radio systems, cybersecurity, related technology, and related debt service to eligible capital uses.
  • Permit no more than 25 percent of a municipality's annual distribution for documented maintenance and operating costs of eligible infrastructure and public-safety assets.
  • Continue to exclude unrelated administration, general payroll, and benefits.
  • Require an open-meeting governing-authority vote to use the operating allowance.

Projection

Forward-looking figure under stated assumptions. Not a reported or derived actual.

Proposal figures and proposal language. Not enacted law, and not a change to how the pool is divided among municipalities.

Source
Proposed defined use-tax changes. Published by Mississippi Municipal Revenue Partnership proposal, August 2026.
As of

Expanding eligible uses in increments

Widening the list of eligible use-tax purposes a step at a time is an ordinary legislative approach, and it is the approach the Partnership asks for here: defined additions to eligible uses, a capped operating allowance, and an open-meeting vote before that allowance is used.

The Legislature has already taken an incremental step of exactly this kind. House Bill 1386 of the 2026 Regular Session — Chapter 377, Laws of 2026, effective July 1, 2026 — amended Mississippi Code Section 27-67-35 to authorize municipalities to use these distributions for sidewalk repair, maintenance, and reconstruction. The Partnership's proposal extends that same defined-use approach to public-safety assets.

Questions from a small town

Clerks and governing authorities are welcome to use the secure contact form, or to read the accountability commitments that accompany the request.