The Starkville Board of Aldermen has made a request to the Mississippi State Legislature to add an additional penny to the Starkville luxury tax in order to raise funds for a conference center.The current 2-percent luxury tax affects the food and beverage industry as well as hotels and motels. Luxury tax is added to the 7 percent state tax, making the current tax on Starkville meals 9 percent. It will become 10 percent if the action passes.
Whether or not the resolution is passed will ultimately be left up to the voting public as the board also requested a referendum (a public vote on the issue).
Ward 5 Alderman Matt Cox said the requested resolution contained information on public facilities, but most importantly a Starkville conference center.
“[The center will be] something that will allow us to host events, whether it be for the university or community, because we don’t have the space today and these type of conferences are having to go to the Coast or Tunica and in some cases out of state,” Cox said.
He also said a conference center will attract people from all over North Mississippi, which will benefit local businesses.
“As you have these multi-day conferences, meetings and events, there will be more stays in our hotels, more people eating in our restaurants and more people shopping in our stores,” he said. “There is real potential for economic impact.”
Cox said the city has been approached by developers who would like to bring in big name restaurants and stores if a conference center is built.
He said he cannot disclose the “big names” because the planning is still in early stages.
“Some of the new opportunities are the type of names and businesses that students as well as members of our community have asked us to go out and get,” he said.
All of the money collected from the luxury tax is directly reinvested into the Starkville community, Cox said.
“The first year [the luxury tax was added on] we collected and reinvested about $500,000 in the community,” he said. “This year it is more than $1 million. You can look at it as a tremendous success.”
The money the luxury tax brings in is divided and distributed to further the community.
Restaurant owners are worried about how another tax raise on their industry will affect business.
Raymond Jackson, head chef and kitchen manager at Doe’s Eat Place, said if the tax goes up he will have no other choice but to pass it on to customers in order to maintain the same level of service and cuisine he offers.
“We’re not going to decrease our quality to absorb the cost,” he said. “It would have to be passed on to the customer, unfortunately.”
John Thompson, owner of Wasson’s Fish House, said if the tax passes his restaurant will most likely absorb the tax, take the loss and not pass it along to customers.
“I mean, it has got to stop somewhere,” he said. “Everything else gets passed along [to customers].”
Ty Thames, owner and head chef of Bin 612, said prices regarding all aspects of running a restaurant have been rising recently, from wheat flour to truck deliveries.
“In our industry in particular, everything is going up,” he said.
He said he understands the benefits of the tax, but the tax should be applied to another industry.
Thames said it could destroy restaurants on the fringe of making a profit.
“Everybody looks at taxing restaurants first; it’s the first place people go,” he said, “but we’re already at a 9-percent tax.”
Tiffany Brady, freshman apparel, textiles and merchandising major said the restaurant tax is already high as it is.
“The benefits of the luxury tax won’t benefit students in the long run because most of us won’t stay in Starkville,” she said.