Tuesday, March 27, 2012

Rep. Jeff Smith (R - Columbus) pushing an inventory tax credit scheme that would take approximately $350,000,000.00 from state general fund

Rep. Jeff Smith (R - Columbus) is pushing an effective repeal of the inventory tax that he thinks will lead to more businesses coming into Mississippi.  In short, it's another gimmick to pad the wallets of the PACs who funded Republican election efforts this past year.  Rep. Smith has admitted that this legislation would cost the state about $350M between now and 2019.

The bill would work by giving manufacturers an increasingly large tax credit for ad valorem taxes paid.  By 2019, manufacturers and distributors would get a dollar-for-dollar credit.  By the end of FY2019, this legislation would have taken approximately $350M out of the state coffers.  There is no plan to replace that money, it will have to come from new businesses that are supposed to be brought in by the lure of no inventory taxes.

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