Jackson voters overwhelmingly reject measure to boost tourism tax

Jackson voters soundly rejected a ballot measure on Tuesday that would have boosted taxes on restaurant checks and hotel bills, dealing a financial blow to the city’s tourism agency that had counted on tax proceeds to bridge a sizable gap in its budget.

The referendum garnered 46% of the vote – far short of the required 60% to win passage.

Had it passed, taxes on restaurant bills would have risen from 1% to 1.5% and hotel stays from 1% to 2%. The additional revenue would have benefited Visit Jackson, the city’s tourism office. 

A reaction from Visit Jackson officials was not immediately available, but a spokesperson previously told Mississippi Today she hoped voters would be sympathetic to the agency’s financial challenges.

“We’ve done a lot with what we have been given, and we will continue to do the work that will help improve the quality of life for our citizens and that will still make us a welcoming and sort of destination for visitors,” Visit Jackson spokesperson Yolanada Clay-Moore had said.

Visit Jackson has operated on a $5.4 million budget for the past two years, which included about $1.7 million a year from the COVID-era American Rescue Plan Act. 

Those funds stopped after the 2026 fiscal year, leaving a hole in the agency’s budget.

Even if the boost had been ratified, Jackson’s higher tourism taxes would have kept the city’s rates lower than surrounding suburbs. Ridgeland, Flowood and Brandon all have a 10% restaurant tax and 9% lodging tax when combined with the state’s sales tax, according to the Mississippi Department of Revenue. Neighboring Madison only observes the state’s required 7% sales tax.

The referendum’s failure means Visit Jackson will have to continue relying on the city’s current 1% flat tax, which has been in place since 1983.

The increased tax rate would not have fully fixed the agency’s budget gap. Visit Jackson estimated a $1.2 million budget increase this fiscal year if the tax were able to be implemented by February, leaving a shortage of $500,000.

The agency wanted to campaign for increased tourism earlier, Clay-Moore said, but was put on hold because of the pandemic and the arrival of temporary federal aid.

While there is no plan to fully fix the hole left by the ARPA funds, Clay-Moore said the agency would be able to operate with the funds it receives.