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HB 4012

City of Clinton; extend repeal date on restaurant tax.

2026 Regular Session Introduced by Clay Mansell

Extends Clinton’s 2% restaurant tax to fund tourism and parks/recreation through July 1, 2030, with voter approval and dedicated annual audits.

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Bill Summary · HB 4012

Summary of HB 4012 (Mississippi, 2026 Session)

Purpose and Intent

HB 4012 proposes to extend the repeal date of a 2% restaurant tax in the City of Clinton. The tax is earmarked to fund tourism promotion and parks and recreation within Clinton. The bill extends the repeal date from July 1, 2026, to July 1, 2030.

Key Provisions and Changes

  • Scope and definitions (Chapter 950, Local and Private Laws of 2022):

    • Defines terms related to the tax: "City" (City of Clinton), "Governing authorities," "Prepared food," and "Restaurant."
    • Clarifies exclusions: schools, hospitals, convalescent or nursing homes, and restaurant-like facilities operated by these institutions are not considered restaurants for purposes of this act.

  • Tax authority and rate (Section 2):

    • The Clinton governing authorities may levy a tax on all restaurants selling prepared food and drinks to the public.
    • Tax rate capped at 2% of gross restaurant sales.

  • Collection and remittance (Section 2):

    • Tax must be added to sales prices and collected from customers when feasible.
    • Remitted to the appropriate authority (implementation details align with standard sales tax collection practices).

  • Election and approval processes (Section 3):

    • Before imposition, the city must pass a resolution stating intent to levy, the proposed rate, and the election date.
    • Requires a public election; 60% of voters must approve for the tax to be levied.
    • Notice requirements: published weekly for at least three consecutive weeks prior to the election.
    • Certification to the Department of Revenue at least 30 days before the tax becomes effective.

  • Administrative and accounting requirements (Section 4):

    • City must notify the Department of Revenue of the effective date.
    • Tax collected through the Department of Revenue, following standard sales tax procedures.
    • Revenue from the tax is deposited into a separate special fund (not the general fund) and audited annually by an independent CPA.
    • Audits funded from the tax revenue.

  • Use of proceeds (Section 2):

    • Revenue dedicated to promoting tourism and parks and recreation in Clinton; cannot be treated as general fund revenue.

  • Sunset/ repealer (Section 5):

    • The repeal date is extended to July 1, 2030. If not renewed or otherwise addressed, the act will repeal on that date.

Who/What Is Affected

  • Municipal government: Clinton’s governing authorities gain the discretion to levy the tax, subject to voter approval.
  • Restaurant industry in Clinton: Restaurants selling prepared foods and drinks to the public would be responsible for collecting the tax from customers.
  • Residents and visitors: Indirectly affected through the added cost of prepared foods at participating establishments.
  • City finances: Revenue is placed in a dedicated fund for tourism and parks/recreation and is independently audited.

Procedural and Timeline Aspects

  • Election-based authorization: Tax requires a voter-approved election (60% yes vote).
  • Implementation timeline: If approved, tax collection would follow standard state-levy procedures with effective date set by municipal resolution and Department of Revenue notification at least 30 days before start.
  • Sunset extension: New repeal date is July 1, 2030.

Overall, HB 4012 preserves Clinton’s authority to levy a 2% tax on restaurant gross proceeds, extends its sunset to mid-2030, and ensures dedicated use of the proceeds for tourism and parks/recreation, with required governance, reporting, and voter approval safeguards.

Compiled from official sources — confirm details with the bill’s official record.

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