Bills demise ends state sales tax rebates for retail development

Mississippis tourism tax development incentives failed to gain enough legislative support for renewal last week and will expire July 1, ending the states practice of awarding tens of millions of dollars as incentives for development of shopping malls and retail plazas.

The Mississippi Development Authority so far has awarded up to $155 million in potential subsidies for three shopping malls since legislators widened the sales tax rebate program last year to include cultural retail attractions, or what are more commonly known as retail centers and shopping malls.

Under the terms of the law, the state returns 80 percent of sales taxes collected at a development over 10 years, until the total collected reaches 30 percent of the construction price.

Lawmakers this week declined to extend the tax credits, thus letting them run out on July 1. House Bill 1233, sponsored by Rep. Rita Martinson, R-Madison, would have extended the program by three more years. After a lawmaker questioned the bill last week, it was moved to the bottom of the House calendar, where it remained without a call up.

Martinson said in an interview with The Associated Press she thinks incentives have been helpful, but conceded there was some sentiment to let the lures run out.

We might even think about letting it go, she told AP. It might be at the point to sit back and see what weve done.

State Sen. David Blount, who does commercial leasing for retail space, said he is glad to see the state cease creating an unlevel playing field for retail businesses. Its favoritism of one business over another, the Jackson Democrat said.

Many economists also voice doubts about subsidizing retail development as well. Good Jobs First, a nonprofit group that is skeptical of business subsidies, is particularly critical of giving money to retailers, saying they dont pay well or create spinoff jobs, the AP reported.

Building new retail space doesnt grow the economy, it just moves sales and lousy jobs around, the group writes.

The first retail development to qualify for the widened incentives was Pearls Outlets of Mississippi, where Spectrum Capital could get up to $24 million of its $80 million investment back. That mall opened in November.

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Bills demise ends state sales tax rebates for retail development