UPDATE: Commission votes to shrink state car tag discount

JACKSON – Barring any last-minute intervention by lawmakers, Mississippi car tags are now set to increase July 1, anywhere from a few dollars to a few hundred.

The state Tax Commission voted Tuesday to decrease the discount people receive for tag renewal.

Some lawmakers want to increase the cigarette tax to head off an increase tags prices.

The 1994 Legislature created tag discounts by increasing the sales tax rate for vehicles. They made a fund to hold part the 5 percent vehicle sales tax. Money from the fund is diverted to counties to replace local taxes that are lost because of the tag-renewal discounts.

Vehicle sales have decreased during the recession, and the tag discount fund is running short of cash.

The Associated Press

Click video to hear audio