But in at least one instance, Republican Gov. Phil Bryant is asking legislators not to change the law during the upcoming 2013 session.
In his budget recommendation to the 2013 session, Bryant is asking legislators to leave in place a 2007 law that would result in most Mississippi businesses – those with a monthly state tax liability of less than $50,000 – not having to pay accelerated taxes every June.
“This move will help our job creators better manage their cash flows and resources, and will help Mississippi establish a more secure environment for further private investment and job creation,” Bryant said in his budget proposal.
It also will mean $35 million less will be available to budget during the 2013 session.
During the 2002 session – in the midst of another state budget crunch – legislators passed a law to require businesses with a monthly tax liability of at least $20,000 to pay 75 percent of the taxes they owe in July a month earlier.
That way the taxes were available to appropriate during the 2002 legislative session.
The 2002 law required the accelerated tax collection to occur each June.
But many small businesses complained the practice harmed them because it created “an annual cash-flow nightmare” for them. Some said they had to borrow funds in June to pay the taxes that normally would not be owed until a month later in July.
In 2007, responding to business concerns, the Legislature – without a dissenting vote in the two chambers – changed the law to require businesses with tax liabilities of $50,000 – as opposed to $20,000 – to pay the accelerated tax liability in June.
That, according to Bryant, would mean the number of businesses impacted by the accelerated tax would drop from more than 2,700 to about 900.
After the Legislature made the change in 2007, though, the recession hit, accompanied with an unprecedented drop in state tax collections. Because of that, legislators have changed the law each year since 2007 to delay the enactment of the change in the accelerated tax liability from $20,000 to $50,000.
Ron Aldridge, state director of the National Federation of Independent Business, said, “By no longer delaying the increased threshold for paying the accelerated tax that the Legislature approved in 2007 and then delayed beginning in 2008, the Legislature would greatly ease the financial pressure on small businesses.”