Sales tax declines could result in more expensive car tags in DeSoto County - WMC Action News 5 - Memphis, Tennessee

Sales tax declines could result in more expensive car tags in DeSoto County

SOUTHAVEN, MS (WMC-TV) - A decline in the sales of new cars plus declining sales taxes could spell major revenue problems for the state's fastest growing county, according to DeSoto County Tax Collector Joey Treadway.

"Sales tax is way off, and when that doesn't come and we're still paying out legislative credit money to every vehicle in the county, and sales tax is down 50 percent, it just don't match," Treadway said.

The legislative credit he refers to is a bill that was enacted in 1994 to keep the price of car tags down, while giving drivers a discount which come from sales tax.  Currently, the sales tax loss countywide is approximately $100,000 a month.

"You take that times 12, which our fiscal year ends in October, that's gonna push you close to 1.8 to 2 million dollars that we won't get back from the state through the credit," Treadway said.

In terms of business, car dealers like Jimmy Gray Chevrolet in Southaven are feeling the pinch. Slumping car sales, down 50 percent, are not helping the problem, and many dealers are struggling.

"It's just not this dealership here," a Jimmy Gray representative said. "In Southaven as a whole, there's six dealerships, and all of us are affected by it."

Treadway says everyone is responsible for the fiscal crisis.

"But it's something we gotta work out," he added. "We put ourselves here. We gotta work ourselves out of it."

But, Treadway said, that might be easier said than done. If loss projections hold, Mississippi's legislature will either have to lower the current credit given car tag buyers, which will increase prices, or borrow from the state's 'rainy day' fund.

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