Jackson hotel, restaurant taxes could increase with Mississippi Senate bill

• A bill in the Mississippi Legislature proposes a tax increase on hotels and restaurants in Jackson.
• The increased revenue would benefit the city’s tourism department, Visit Jackson.
• The hotel tax rate would increase by 1% and the restaurant tax rate by 0.5%.
• Legislators say the proposed rates would keep Jackson competitive with other cities in the region.

A bill making its way through the Mississippi Legislature would bump up tax rates on hotels, motels and restaurants in Jackson, with the revenue benefitting the city’s tourism department.

The proposal would increase the hotel tax rate by 1% and the restaurant tax rate by 0.5%, modest bumps, said bill sponsor Sen. Hillman Frazier, D-Jackson, that would go a long way for the Jackson Convention and Visitors Bureau, known as Visit Jackson.

“We’re trying to be very conservative here with this increase,” he said in a March 20 interview. “These changes are just enough to maintain operations.”

With inflation taking ever-growing bites out of profits and reduced state funds on the horizon as the income tax revenue decreases, Frazier said a minor tourism tax increase is necessary to keep Visit Jackson well-funded.

Hotels and motels currently have an 11% tax rate, most of which is attributed to the 7% sales tax. The convention center tax adds another 3%, and Visit Jackson nets 1%. Under Frazier’s bill, which has been co-authored by four other Jackson-area senators, Visit Jackson’s share would double.

For restaurants, the rate would increase from 9% to 9.5%, with Visit Jackson collecting 1.5% of that sum. The increased revenue, according to documents prepared by Visit Jackson and shared with legislators, would fund hotel-restaurant partnerships, collaborations with local farmers and culinary demonstrations at city events.

The rate changes, according to the documents, would yield the bureau around $2 million in additional revenue each year.

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The crucial part of the bill, Frazier said, is that Jackson will remain competitive when compared to other cities in Mississippi and throughout the south.

The proposed 12% hotel tax rate falls below nearby New Orleans, which boasts a 16.2% tax and $3 nightly fee, and Birmingham, where the $3 nightly fee is accompanied by a 17.5% tax.

Neighboring Brandon, Flowood and Richland levy a 12% hotel tax and 9% restaurant tax, the documents read, nearly identical to the rates that Jackson would adopt with legislative consent.

Approval from other legislators may present a challenge, Frazier said, explaining that some lawmakers have opposed the provision in the past because it increases the amount they pay when they check into Jackson-area hotels during the session. His bill has passed two committees as of March 20 and faces a full vote in each chamber before it can become law.

“Visit Jackson does a very good job selling Jackson and bringing people here to visit,” Frazier said. “We need to give them the resources to keep doing what they’re doing.”

Bea Anhuci is the state government reporter for the Clarion Ledger. She covers the Mississippi Legislature, and its impact on Jackson. Email her at banhuci@usatodayco.com or message her on Signal @beaanhuci.42.