2% food and beverage tax for MAX still in effect

MERIDIAN, Miss. (WTOK) – It has been nearly seven years since ground was broken on the Mississippi Arts and Entertainment Experience. To help pay for the new museum, Meridianites voted on and approved a two percent food and beverage tax. That tax is still being collected, but for how much longer?

So far, $14,733,460.64 has been collected since the tax began in 2016.

“Right now we are down to about $22 million remaining on the bond,” said Brandye Latimer, the city of Meridian’s chief financial officer. “We did look at a bond savings or interest savings. The bonds are being refinanced at the callable date for a lower interest rate.”

The most money collected from the 2 percent tax was during the past fiscal year at $3,135,231.26.

“The $20 million is being paid over 20 years. The two percent is first going to pay the debt service and the bond offering,” Latimer explained. “It’s also used for equipping, maintenance and operation of the MAX.”

When it came about, some restaurants were concerned the 2 percent tax would hurt their business. Weidmann’s owner, Charles Frazier, said it’s doing the opposite. The MAX brings in thousands of people, therefore, bringing in more business for surrounding restaurants.

“As far as the Restaurant Association, we had a lot of meetings with different restaurants, and they had a lot of concern over how this would affect business. Adding a tax to anything is always questionable,” Frazier said. “We are seeing a lot of benefits from the MAX all over the city. This kind of artistic revival we see, I think it’s great overall for everyone downtown and all over Meridian.”

You might not see the two percent itemized on your receipt, but it’s still included. Many restaurants are combining the tax with the current seven percent sales tax, which makes the tax on your receipt a total of nine percent.

Before such a tax can go into effect, it first must be approved by the Mississippi Legislature. In 2005, House Bill 1770 was approved allowing the city of Meridian to put the tax to a vote.

The 2 percent tax passed in a citywide vote Aug. 16, 2016, getting 68 percent approval. The tax went into effect Nov. 1, 2016. The Meridian City Council approved the sale of $20 million in general obligation bonds Dec. 6, 2016. It’s a 20-year bond, and once you factor in interest, the total cost is $30,530,575.88 .

Once the bonds are paid in full, Latimer said it’s possible the two percent tax could go toward other projects, but that would require approval from the Mississippi Legislature.

“There could be an opportunity to go back to the legislature and say, ‘we paid off this with the 2 percent tax and everyone is used to paying it now. Can we finance something else large in the city of Meridian with the two percent?” said Latimer.

The MAX cost around $50 million to build. It’s a 58,500 square foot facility with interactive exhibits that will teach you all about artists from Mississippi. Admission is $14 for adults. Read more about the MAX here.

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