The Mississippi Department of Revenue has deemed Oct. 1 as the start date for the recently-approved 3 percent sales tax on restaurants in the City of Petal that is expected to bring approximately $750,000 in additional annual revenue to the city.
Because sales tax figures run two months behind – in other words, taxes that are collected this month are received two months later – city officials should receive the first monthly check from the tax in December.
“We had hoped, with papers getting pushed between us and the department of revenue, that this would fit our timeline,” Mayor Tony Ducker said. “We anticipated getting that first check in December, but we’re already seeing some of the benefits, knowing that it had passed.
“Some of the (campaign) commitments I made initially are being realized, as far as I’m being able to replace some firefighters to a police pay raise that we’ll look at. So we’re already seeing some benefits from it on the front end. Obviously, we’re looking at this as a transition year, so next year we’ll be able to see the full impact of it.”
The measure was passed at an Aug. 5 special election, when 74 percent of voters approved the additional tax. Four hundred and fifty-seven residents voted in that election; of that, 344 voted for the measure and 113 voted against it.
The matter required a 60 percent voter approval to pass.
“It’s more important now than ever for us to not only support our restaurants, but every business in Petal,” Ducker said. “Outside entities across the country are looking for places to open up and expand, and they look at our numbers.
“The more we support our entities over here, the more attractive we look for more investment. I think we’ll have some more good things going forward – some interesting things that are on the front end of discussions as well, between the city and other investors for different types of businesses around town.”
Under the tax increase, an individual paying a $10 tab at a Petal restaurant will pay an extra 30 cents on that bill. The funds raised from the tax will go toward the city’s Parks and Recreation Department, which will allow the city to maintain that department at its current level.
That, in turn, will free up money in the city’s fund that could be used for measure such as the police department, fire department or infrastructure.
“Last year, we had a $400,000 hole (in the budget), but we think we’ll grow by a couple hundred thousand,” Ducker said. “And we’ve gotten some federal assistance as well that should plug that $400,000 hole, but things are going to be tight for a little bit.
“I would like to see some of that money rolling in first, to see how much it is to make sure that we can count on it. If we do the right things with the money, you could see it maximize our money situation in this town, and actually start taking care of some things that people are paying to take care of.”
The restaurant tax will not affect property, or ad valorem taxes; as a city entity, Petal has not raised those taxes in more than a decade. The city’s millage rate - which is a unit of monetary value equal to one-tenth of a cent that determines the amount of property taxes residents pay - will remain at 46.21 mills.
The idea of a sales tax increase at Petal restaurants has been passed around for the last several months as an option to increase much-needed revenue for other city programs and departments without having to raise property taxes or cut personnel. The proposal for the special election passed both houses of the Mississippi Legislature in March, and the Petal Board of Aldermen voted unanimously on June 28 to set the date for the referendum.
“We didn’t win the lottery; we still have to watch how we spend our money,” Ducker said. “If not, we’ll be right back in the same situations we’ve been in over the last few years.
“We do a Shop Petal First; I’d love to see something where we do an ‘Eat Petal First’ program as well. We can’t forget about our restaurants."
A similar sales tax measure was passed in Hattiesburg in early 2019, when voters overwhelmingly approved an additional 1 percent sales tax at Hub City restaurants, hotels and motels. The funds from that measure are currently going toward several Parks and Recreation Department projects around the city, including a splash pad in Palmers Crossing, an extension of the walking trail at Duncan Lake and the addition of batting cages at Vernon Dahmer Park.
“People still go to Hattiesburg, and Hattiesburg has had this tax now for years,” former Mayor Hal Marx said in a previous story. “They’ve had a 2 percent tax for about the last 20 years, and then they added another percent just a year or two ago.
“I haven’t noticed any decrease in the number of people going out to eat in Hattiesburg. So I think people are willing to do it; I don’t think people are bothered as much by it as some opponents of it make it seem.”
