Some Mississippians have expressed concerns that smoke-free laws could harm restaurants and decrease local and state sales tax. Numerous studies and reports from states and communities outside of Mississippi, based on several objective outcomes which are examined before and after passage of comprehensive smoke-free legislation, revealed no impact or positive impacts on sales tax revenue and employment in the hospitality industry.
Current Situation in Mississippi
Almost half of Mississippi restaurants are located in communities with smoke-free ordinances, and sales tax revenues from restaurants have NOT decreased in the time since the ordinances were enacted. There are currently 41 municipalities in Mississippi that have implemented a comprehensive smoke-free ordinance, and twelve others have passed partial smoke-free ordinances that exempt bars. According to the Mississippi State Department of Health database of restaurants in this state, almost half (46%) of restaurants in this state are in one of these communities and thus are subject to smoke-free ordinances. Note that this percentage only includes those restaurants in communities with smoke-free ordinances and does not include restaurants that are voluntarily smoke-free, so it’s likely that substantially more than half of restaurants in Mississippi are smoke-free either due to choice or local ordinance. Analysis of sales tax revenue suggests that these smoke-free policies and ordinances have not decreased revenue.
The optional local tourism tax allows us to objectively examine the impact of these smoke-free ordinances. Mississippi cities and towns may implement an additional tourism tax on restaurant and hotel sales. Although not every municipality implements this optional hospitality tax, sixteen of the municipalities that have implemented a comprehensive smoke-free ordinance also have implemented a hospitality tax. Trend analyses for revenue from this tourism tax demonstrates that no community that enacted a smoke-free ordinance experienced a loss in revenue. Tourism tax revenues have been increasing in many of these communities, and have continued to increase following the enactment of smoke-free ordinances. The charts below illustrate revenue trends before and after smoke-free ordinances for several Mississippi communities.
Starkville's Hospitality Tax
Current Situation in Mississippi
Almost half of Mississippi restaurants are located in communities with smoke-free ordinances, and sales tax revenues from restaurants have NOT decreased in the time since the ordinances were enacted. There are currently 41 municipalities in Mississippi that have implemented a comprehensive smoke-free ordinance, and twelve others have passed partial smoke-free ordinances that exempt bars. According to the Mississippi State Department of Health database of restaurants in this state, almost half (46%) of restaurants in this state are in one of these communities and thus are subject to smoke-free ordinances. Note that this percentage only includes those restaurants in communities with smoke-free ordinances and does not include restaurants that are voluntarily smoke-free, so it’s likely that substantially more than half of restaurants in Mississippi are smoke-free either due to choice or local ordinance. Analysis of sales tax revenue suggests that these smoke-free policies and ordinances have not decreased revenue.
The optional local tourism tax allows us to objectively examine the impact of these smoke-free ordinances. Mississippi cities and towns may implement an additional tourism tax on restaurant and hotel sales. Although not every municipality implements this optional hospitality tax, sixteen of the municipalities that have implemented a comprehensive smoke-free ordinance also have implemented a hospitality tax. Trend analyses for revenue from this tourism tax demonstrates that no community that enacted a smoke-free ordinance experienced a loss in revenue. Tourism tax revenues have been increasing in many of these communities, and have continued to increase following the enactment of smoke-free ordinances. The charts below illustrate revenue trends before and after smoke-free ordinances for several Mississippi communities.
Starkville's Hospitality Tax
Hattiesburg's Hospitality Tax
Tupelo's Hospitality Tax
Ridgeland's Hospitality Tax
