Should a Mississippi county distribute privilege tax revenue under § 27-19-11 to municipal school districts within the county?

Plain-English summary

Mississippi imposes highway privilege taxes on certain motor vehicles under Miss. Code Ann. § 27-19-11. Section 27-19-11 says these taxes are distributed by the county "as they would if these collections were ad valorem taxes." The Pascagoula-Gautier School District, a municipal school district where the City of Pascagoula is the levying authority, asked whether the County should be sharing § 27-19-11 privilege taxes with it.

The AG said no, reaffirming a 2017 opinion (Vance, Jan. 20, 2017). The reasoning is structural:

• Counties levy ad valorem taxes for county purposes (county government, county school district).
• Municipalities levy ad valorem taxes for municipal purposes (city government, municipal school district).
• § 37-57-1 confirms this division.
• Counties have no statutory authority to levy ad valorem taxes for municipalities or municipal school districts.
• Therefore, when § 27-19-11 says the privilege taxes are distributed as ad valorem taxes, that means distributed to the county and county school district only.

The District had pointed out that Jackson County collects the City of Pascagoula's ad valorem taxes under an interlocal agreement and forwards them to the City for the District's benefit (under § 27-41-2). The AG specifically said this doesn't change the answer: collecting taxes for a city as a service does not give the county authority to also distribute § 27-19-11 privilege taxes to that city or its school district.

So if your district is a municipal school district, you don't get a share of the county's § 27-19-11 privilege tax revenue. The county and county school district keep it all.

What this means for you

If you are a municipal school district superintendent or business manager

Don't budget for § 27-19-11 distributions; you won't get any. Your privilege-tax revenue source for vehicles registered within your municipality flows from the city's own collection processes, not from the county's distribution of § 27-19-11 taxes.

If you are a county chancery clerk or tax collector

This opinion confirms your distribution practice: § 27-19-11 privilege taxes go to the county and the county school district. Don't share with municipalities or municipal school districts. The earlier Vance opinions (Jan. 20 and July 7, 2017) settled this; Ellzey reaffirms it.

If you are on a county board of supervisors

If your county has been distributing § 27-19-11 taxes to a municipal school district under a longstanding informal practice, this opinion is the basis for stopping. The opinion explicitly says the AG cannot validate or invalidate past actions, but going forward, the distribution should go only to the county and county school district.

If you are a state legislator

Several Mississippi school districts have flagged this as an inequity issue: county-level privilege tax revenue from vehicles registered everywhere in the county, including in municipalities, ends up only in the county school district's budget. If you want to change this, the path is amending § 27-19-11 to provide for direct distribution to municipal school districts based on enrollment or registration.

If you are at the State Auditor's office

This opinion supports any audit findings against counties that have been improperly distributing § 27-19-11 taxes to municipalities or municipal school districts.

Common questions

Q: What is § 27-19-11 highway privilege tax?
A: It's a tax on certain motor vehicles, including commercial vehicles, buses, property carriers, and similar. The tax is collected by the county and distributed in the same manner as ad valorem taxes.

Q: What is the difference between a county school district and a municipal school district?
A: A county school district covers the unincorporated portions of a county and (often) some incorporated areas without their own school district. A municipal school district is established for a specific city, with the city's governing authority as the levying authority. Pascagoula-Gautier School District is a municipal school district covering the cities of Pascagoula and Gautier.

Q: Why doesn't the county share § 27-19-11 revenue with municipal school districts?
A: Because § 27-19-11 says distribute as ad valorem, and counties don't have ad valorem levy authority over municipalities. The statutory language ties privilege tax distribution to ad valorem distribution, and ad valorem distribution doesn't include municipalities.

Q: Doesn't this seem unfair? Vehicles registered within a city pay the privilege tax to the county.
A: The Legislature could have written the distribution rules differently. As written, § 27-19-11 allocates the revenue to county-level entities. Whether that's fair is a policy question for the Legislature, not the AG.

Q: What about § 27-41-2 interlocal agreements?
A: § 27-41-2 lets counties and cities cooperate on tax collection. Jackson County collects ad valorem taxes for the City of Pascagoula. But that interlocal cooperation on city ad valorem doesn't transfer to § 27-19-11 privilege tax distribution. The privilege tax distribution rules are set by § 27-19-11 itself.

Q: Can the county distribute § 27-19-11 revenue to a municipal school district by interlocal agreement?
A: Possibly not. § 27-19-11's distribution scheme is statutory, and prior AG opinions have been firm that interlocal agreements cannot be used to redirect statutorily mandated distributions. Specific arrangements should be reviewed with counsel and the State Auditor.

Q: What about other privilege taxes (railcar, rental car)?
A: § 27-19-11 specifically covers certain highway privilege taxes. Other tax types have their own distribution rules. See, e.g., the Compton opinion (Feb. 8, 2024) addressing privilege, railcar, and rental sales tax distributions to a county school district.

Background and statutory framework

§ 27-19-11 levies and assesses certain highway privilege taxes (on property carriers, buses, and similar vehicles) and provides that the proceeds "must be distributed by the county as they would if these collections were ad valorem taxes." That distribution rule is the heart of the question.

§ 37-57-1 sets up Mississippi's basic ad valorem levying authority for schools:

County boards of supervisors are generally required to levy and collect ad valorem taxes on behalf of county school districts while the governing authorities of municipalities levy and collect ad valorem taxes on behalf of municipal school districts.

The structure is binary: counties for county districts, cities for municipal districts. There is no overlap.

§ 27-41-2 lets counties and cities enter interlocal agreements for tax collection. This is procedural; it allows efficiency but does not change the underlying levying authority or the substantive distribution rules.

The 2017 Vance opinion (and a follow-up Vance in July 2017) addressed the same question for Madison County and concluded the same way: no distribution to municipalities or municipal school districts. Ellzey applies the same rule to Jackson County and Pascagoula-Gautier School District.

The opinion also reflects a recurring AG approach to tax-distribution questions: the statutory text controls, and informal or interlocal practices cannot override it. Counties cannot distribute statutorily allocated revenue to recipients the statute doesn't reach.

The AG also noted the limit on AG opinions (prospective only, no validating or invalidating past action) under § 7-5-25. So historical distributions, if they did occur improperly, are factual matters for the State Auditor and (if needed) the courts. The AG's role is to clarify the rule going forward.

Citations and references

Statutes:
- Miss. Code Ann. § 7-5-25 (AG opinions limited to prospective state-law questions)
- Miss. Code Ann. § 27-19-11 (highway privilege taxes; distribution as ad valorem)
- Miss. Code Ann. § 27-41-2 (county-municipal interlocal tax-collection agreements)
- Miss. Code Ann. § 37-57-1 (ad valorem levying authority for school districts)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2024/03/B.Ellzey-February-28-2024-Mississippi-Code-Annotated-Section-27-19-11.pdf

Original opinion text

February 28, 2024

Billy Ellzey, Superintendent
Pascagoula-Gautier School District
Post Office Box 250
Pascagoula, Mississippi 39568-0250

Re: Mississippi Code Annotated Section 27-19-11

Dear Superintendent Ellzey:

The Office of the Attorney General has received your request for an official opinion.

Background

In 2017, the Attorney General's Office opined: "[w]e are aware of no authority for Madison County to levy ad valorem taxes for the support of municipalities or municipal school districts. Consequently, the privilege tax proceeds received pursuant to Section 27-19-11 must be distributed only to the county and the county school district." MS AG Op., Vance at *2 (Jan. 20, 2017). You state that based on this opinion, the chancery clerk has advised the Pascagoula-Gautier School District that Jackson County will no longer split privilege tax proceeds with the municipalities and municipal school districts in Jackson County under Mississippi Code Annotated Section 27-19-11.

We understand from a later conversation with you that the Pascagoula-Gautier School District ("School District") is a municipal school district and that the city of Pascagoula ("City") is the levying authority for the School District in accordance with Section 37-57-1. Pursuant to an interlocal agreement, Jackson County collects the City's ad valorem taxes and then forwards them to the City for the benefit of the School District as allowed under Section 27-41-2.

Question Presented

Should privilege tax proceeds received by a county pursuant to Section 27-19-11 be distributed to municipal school districts within the county?

Brief Response

No. The privilege tax proceeds received by a county pursuant to Section 27-19-11 may not be distributed to municipal school districts within the county.

Applicable Law and Discussion

As an initial matter, opinions of this office are issued pursuant to Section 7-5-25 for prospective purposes and cannot validate or invalidate past action. We offer no opinion on the distribution of privilege taxes from prior years.

The highway privilege taxes you reference in your request are levied in accordance with Section 27-19-11 and must be distributed by the county "as they would if these collections were ad valorem taxes." County boards of supervisors are generally required to levy and collect ad valorem taxes on behalf of county school districts while the governing authorities of municipalities levy and collect ad valorem taxes on behalf of municipal school districts. Miss. Code Ann. § 37-57-1. This section further provides that "the county or municipal tax collector, as the case may be, shall pay such tax collections . . . into the school depository and report to the school board of the appropriate school district at the same time and in the same manner as the tax collector makes his payments and reports of other taxes collected by him."

In the Vance opinion, Madison County asked whether it "should . . . distribute privilege tax proceeds received pursuant to Section 27-19-11 to (1) the county, county school district, separate municipal school districts and municipalities; or, should distribution be only to the county and the county school district?" MS AG Op., Vance at 1 (Jan. 20, 2017). This office opined that "[w]e are aware of no authority for Madison County to levy ad valorem taxes for the support of municipalities or municipal school districts. Consequently, the privilege tax proceeds received pursuant to Section 27-19-11 must be distributed only to the county and the county school district." Vance at 2. This office further opined that "[t]he fact that a county may, by agreement, collect ad valorem taxes for municipalities would not authorize the county to distribute these privilege tax proceeds to municipalities or municipal school districts." Id. See also MS AG Op., Vance (July 7, 2017) (confirming that these privilege tax proceeds must only be distributed to the county and the county school district). This comports with the above cited statutory authority and remains the opinion of this office.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Beebe Garrard
Beebe Garrard
Special Assistant Attorney General