Mississippi Gov. Haley Barbour recently signed a bill on March 31 that will exclude retail sales tax on prepaid meal plans sold on the campus of state colleges and universities.
Bill Broyles, assistant vice president for student affairs, said students have not always paid tax on meal plans to begin with.
“We used to not assess sales tax on flex dollars, and the tax commission informed us that we were going about the procedure incorrectly,” Broyles said. “So students had to start paying sales tax on October 1, 2008, which we felt that was not right, so since then, we have been working to fix this issue.”
Broyles said House Bill 856 will exempt sales tax from declining balance meal plans like flex dollars.
“From October 1, 2008 to the end of January 2009, students paid over $26,000 on flex dollar sales tax,” Broyles said. “That is thousands of dollars students could be using on food instead of tax.”
Broyles said the tax exemption applies to students only.
Jason Nall, head of campus dining services, said the bill will have an impact on Mississippi State University.
“All students on meal plans or who have flex dollars will no longer be required to pay sales tax on any food products bought with the meal plan or flex dollars on campus,” Nall said.
He said this will allow students to get more with their flex dollars.
“Before, our students were using 7 percent of their meal plans and flex dollars for sales tax, so this will give them more money and more buying power,” Nall said.
He said he thinks removing the tax will be beneficial to both MSU and its students.
“This is a good thing for students because it is basically recognizing our meal plan as a prepaid meal plan just like at elementary schools and middle
schools, and this is recognizing our meal plan as cost associated with education,” he said.
Broyles said the cafeteria and Union will be tax free to flex dollars soon.
“We are having to redo cash registers to not tax students when using their flex dollars,” Broyles said. “We could not start on the project until the law was approved. ITS [Information Technology Services] is working on the cash registers, and we are working to have that finished as soon as possible.”
He said tax-exempt meal plans are what the MSU administration has wanted for a long while.
“This is tremendous, this is what we have wanted all along,” Broyles said. “We want students to be able to experience the benefits of this law as soon as possible, so we are trying to get all the equipment ready as fast as possible.”
Freshman communication major James Carskadon said he thinks the tax exemption will encourage students to use their flex dollars.
“I think that with all of the fees and tuition students are paying it is a good break for students to not have to pay tax on items purchased with flex dollars,” he said.
Broadcast meteorology major Amber Winstead said she thinks this is a good thing for students.
“I believe that since we are required to purchase a meal plan, it will be great for us to get more for each dollar that we spend,” she said.