City of Water Valley; authorize to enact a tax on restaurants for tourism and parks and recreation.

Water Valley allows voter-approved restaurant tax

The law lets Water Valley charge up to 1% on covered restaurants’ gross sales to fund tourism, parks, and recreation. The tax requires approval from at least 60% of qualified voters who vote in a city election. Covered restaurants sell prepared food and drinks for on-site consumption. Certain facilities connected with schools, hospitals, medical clinics, convalescent homes, and nursing homes are excluded. Restaurant operators must add the tax to customers’ bills and collect it. Before the election, city leaders must adopt a resolution stating the rate and tax start date and calling the election. Election notices must appear in a general-circulation newspaper weekly for at least three straight weeks. The first notice must appear at least 21 days before voting; the last, no more than seven days before voting. Ballots must offer “FOR THE TAX” and “AGAINST THE TAX.” The state revenue department must receive a certified resolution at least 30 days before the tax starts. State sales-tax collection and enforcement rules apply. The department keeps 3% of collections for collection costs and sends 97% to the city by the following month’s 15th day. The city cannot treat this money as general revenue; it is dedicated to tourism, parks, and recreation. Before spending it, city leaders must approve a budget showing expected income and expenses. The first budget runs from the tax’s start through the fiscal year’s end; later budgets follow the city’s fiscal year. The city must keep separate records, with an independent certified public accountant auditing them annually after the fiscal year ends. The accountant reports in writing to city leaders, and tax funds pay for the audit. The law took effect upon passage and repeals on July 1, 2029.