SALTILLO • The majority of Saltillo voters said they are quite happy to just pay 7 percent sales tax at restaurants.
During a special referendum Tuesday, Saltillo voted down a measure that would have added a 2 percent sales tax at restaurants and any future hotel room rentals.
The measure needed at least 60 percent of the vote to pass. More than one thousand people took time to vote in the special election, but only 499 voted for the tax while 514 voted against.
For the last two years, city officials have tried to get the special tax approved. In 2017, the city couldn’t find enough support in the state legislature. In March, the legislature passed a local and private bill to allow Saltillo voters to decide whether they want to add 2 percent sales tax. according to the wording of the bill, the money could only be used for tourism and parks and recreation projects.
Since the city doesn’t have any hotels, the tax would have only applied to prepared food and drinks. Saltillo Mayor Rex Smith estimated the tax could have raised as much as $100,000 to the town’s coffers, with at least a portion of that paid for by guests to the city.
With the referendum failing, any new projects will have to be funded entirely by the citizens.
It was not immediately clear if the city will make a third push in 2020.
There are currently 15 cities and one county in the Daily Journal coverage area to levy a special tax on hotels and/or restaurants. While most cities have a 2 percent tax, Aberdeen only levies 1 percent. Fulton asks for 3 percent, but only on hotel rentals.
The cities of Aberdeen, Baldwyn, Booneville, Corinth, Holly Springs, Houston, Oxford, Pontotoc, Ripley, Starkville, Tupelo and West Point collect a tourism tax on both hotels and restaurants. Byhalia, Fulton and Tishomingo County levy the special tax only on room rentals.
Around half of the taxes were set up with no repeal date. The other half are set to roll off the books between 2020-2022, unless the cities ask and receive an extension from the legislature.