Perry Cafeteria will begin charging sales tax on non-meal plan purchases Saturday, but the Mississippi State Tax Commission will decide at the end of this year whether they will withdraw tax exemptions for meal plans.
The commission has already lifted exemptions for purchases outside of meal plans state-wide, but the state institutes of higher learning requested a deferral until the end of the year so that the commission may review the issue, assistant to the president Joe Farris said.
“This represents the end of an exemption that the university has had for over 50 years,” Farris said.
The university received the exemption during that time in the form of a letter specifying Perry Cafeteria in its content, Farris said.
The end of this exemption is an attempt to generate revenue, finance and economics department head Paul Grimes said.
“They’re trying to broaden their tax base,” Grimes said.
For those who do have a meal plan, their plans will continue to be tax free.
“This change puts the cafeteria on the same footing as other dining services on campus as well as other restaurants throughout the state,” Farris said.
Tax on meals will not include Starkville’s two percent food and beverage tax because Perry Cafeteria is outside the city of Starkville, he said.
Sales tax is a regressive tax, which means it causes people with lower incomes to pay more for things. Tax reform is necessary for the state budget to improve, Grimes said.
This change may cause students to choose other eating locales, freshman biological science major Ben Jones said.
“I think people will use The Union more and the cafeteria less,” he said.
With the state trying to generate revenue, the cost of food will raise, and so will the cost of tuition at state universities, and less people will enter college, Grimes said.
As for the future, the State Tax Commission and others in the state will discuss the issue and possibly write legislation concerning the meal plan tax exemption, Farris said.
Some universities deal with their meal plans in a different way than Mississippi State, such as combining their meal plans with their housing costs. However, the State Tax Commission will review all these things and make a decision at the end of the year. There may even be variations on their final decisions for different universities, Farris said.
“If the tax was implemented then I probably wouldn’t get a meal plan next year,” Jones said.
The money generated by the taxes will not go toward funding the university, Farris said.
However, Jones said he feels this money should go toward the school because if students are paying the tax, they should see the benefits.
The meal plan exemption still remains an open question, Farris said.
“There’s something you can always be sure of: death and taxes,” Jones added.