Local governments will soon be able to hit tax refunds

By Steve Wilson
March 11, 2019

Cities and counties could collect certain debts by garnishing state income tax refunds if a bill passed by the Mississippi legislature becomes law.

House Bill 991 would allow local governments to collect any debt or fine that’s at least $50. Different debts could also be combined to satisfy the debt threshold of $50.

The bill passed the House 86-28 back in February and it cleared the Senate by a 30-14 margin last week. It is now headed to Gov. Phil Bryant’s desk for signature.

The legislation was pushed by the Mississippi Municipal League, which said on its Facebook page that it would help reconcile thousands of unpaid municipal court fines in cities and towns throughout the state.

Under the bill, cities and counties would contact the Mississippi Department of Revenue and submit the debt owed it for collection. The local government, or a member organization on its behalf, would send written notice of the intent to the debtor to garnish part or all of their refund.

In addition to the debt, a 25 percent collection assistance fee would also be assessed.

The debtor would have 30 days to contest the garnishment and receive a hearing in front of the government. Appeals of these decisions would be made to the county circuit court.

HB 991 doesn’t explicitly mention county-owned rural hospitals, of which there are 19 in the state, but doesn’t exclude debts paid to them either.

Already, the DOR can garnish state income tax refunds to recover:

  • Unpaid child support.
  • Federal taxes or fees owed.
  • Unpaid student loans (state government loans only).
  • Community college unpaid fees or other debts.

The bill was sponsored by state Rep. Jeff Smith (R-Columbus).

It made it out of the Senate Finance Committee the day before Tuesday’s deadline for general bills to make it out of committee in the opposite chamber.

Last year, there were a pair of billsthat were very similar to this year’s HB 991 for counties and municipalities and all died in committee without making it to the floor.

Two other bills regarding the garnishment of state income tax refunds for the collection of debts were also drafted.

Senate Bill 2194was signed into law and allows community colleges to get the DOR to garnish state income tax refunds for the repayment of unpaid fees or other debts.

Another bill, SB 2608, would’ve allowed public and private non-profit hospitals to do the same thing, but died on the calendar after making it out of the Senate Finance Committee.


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