Can Pascagoula spend the tourism tax it collects from hotels and bed-and-breakfasts on tourism, economic development, and recreation programs?

Plain-English summary

Pascagoula's city attorney asked the AG a one-line question: can the city spend its 3% hotel/motel/B&B tax on tourism, economic development, and recreation? The AG's answer is yes, and the reasoning is mostly tracing the legislative history.

Senate Bill 3212 (2004 Regular Session), enacted as Local and Private Laws 2004, Ch. 1005, authorized Pascagoula to levy and collect up to a 3% tax on hotels, motels, and bed-and-breakfasts "[f]or the purpose of providing funds to promote tourism, economic development and recreation[.]" That same bill required a public referendum before the tax could go into effect. Pascagoula held the referendum on June 21, 2005, and more than 60% of voting electors approved the tax.

The original local and private law had a sunset date that was approaching repeal. The 2023 Legislature passed H.B. 1547 to extend the repeal date of Local and Private Laws 2004, Ch. 1005, to July 1, 2027. So the tax authority, and the spending purposes attached to it, are currently in effect through mid-2027.

Because the statute itself says the funds are for tourism, economic development, and recreation, those uses are authorized. The AG declines to opine on any past spending decisions or whether any specific past expenditure was within the statutory purposes; that's a question of fact outside the AG's authority. The opinion is purely about the legal authority going forward.

This is a short opinion that mostly confirms what the city already understood. It is useful as a clean citation in case anyone challenges Pascagoula's spending of the tax revenue on, say, downtown beautification, port improvements, festivals, or recreation infrastructure. The AG has now confirmed all three categories (tourism, economic development, recreation) are authorized statutory purposes.

What this means for you

If you are Pascagoula city staff handling the tourism tax

The legal authority is clear: tourism, economic development, and recreation are all authorized purposes through July 1, 2027. Document each expenditure with a tag indicating which of the three statutory purposes it advances. That documentation is what gets you through any future audit or challenge.

Be aware of the 2027 sunset. If the legislature does not pass another extension before July 1, 2027, the underlying tax authority lapses and any post-lapse spending becomes a problem. Watch the 2026 and 2027 sessions for either another extension bill or a permanent re-enactment.

If you are a Pascagoula hotel, motel, or B&B operator

The 3% tax is operative and lawful through July 1, 2027. The tax was put in place by a 2004 local and private law and approved by referendum in 2005. The 2023 H.B. 1547 kept it alive through 2027. Continue collecting and remitting it according to your normal schedule.

If you are a city tourism bureau or economic development director

This opinion confirms you can use tax-derived funds to support all three purposes. That gives you flexibility on how to allocate among, for example, festival sponsorships (tourism), industrial recruitment (economic development), and youth-baseball field improvements (recreation). The AG does not require you to allocate evenly; the city governing authorities decide the mix.

If you are a citizen or taxpayer in Pascagoula

The 3% you pay on a hotel room when visiting Pascagoula is a tax that voters approved in 2005 (with 60%+ support). It funds tourism, economic development, and recreation in the city. If you have concerns about specific spending decisions, raise them at city council meetings; the AG opinion confirms the legal authority but does not bless any specific expenditure.

If you are a local-and-private-law drafter at the legislature

This opinion is a small reminder of how local-and-private laws operate. The original law authorized the tax with stated purposes; subsequent extensions kept the same authority alive without changing the purposes. When drafting future local-and-private extensions, preserve the spending purposes language unless the city explicitly wants to change them.

Common questions

Q: How is this different from a state-level tourism tax?
A: This is a local and private law specific to Pascagoula. Mississippi often uses local and private legislation to give a single municipality a specific taxing authority that other municipalities don't have. The legislature controls who gets which taxing authority and on what terms.

Q: When does this tax authority expire?
A: July 1, 2027, unless the legislature extends it again. The 2004 law had a sunset; the 2023 H.B. 1547 pushed the sunset to mid-2027.

Q: What if Pascagoula wants to use the funds for something else, like a city building?
A: The statute lists three purposes: tourism, economic development, and recreation. Spending outside those purposes would be unauthorized and would expose the city to challenge. If the city wants different purposes, it would need to ask the legislature to amend the local and private law.

Q: Did voters have to approve this tax?
A: Yes, the original 2004 law required a referendum, and Pascagoula voters approved the tax with more than 60% support in June 2005. Subsequent extensions did not require new referendums; the legislature can extend the underlying authority without another vote.

Q: Can other Mississippi cities do the same thing?
A: Only with their own local and private law. There's no general statewide statute giving every city this authority; each city has its own bill if it wants this kind of tax.

Background and statutory framework

Mississippi has a layered tax structure for tourism. State sales tax, hotel and motel taxes, and special local levies can all stack on a single hotel room. Local and private laws give individual municipalities authority for specific tourism-tax mechanisms tailored to local needs.

Pascagoula's 3% lodging tax is one of these. The 2004 enactment (Senate Bill 3212, codified as Local and Private Laws 2004, Ch. 1005) gave the city the authority. Section 2 of that law tied the spending purposes directly to "tourism, economic development and recreation." The 2005 referendum locked it in democratically.

The 2023 H.B. 1547 extension is the operative legal hook for current authority. It pushed the sunset from whatever the original date was to July 1, 2027, preserving everything the original law set up. Without the extension, the tax authority would have lapsed and the city would have had to either stop collecting or seek a new authorization.

The opinion's core legal point is that the statute's plain language settles the spending question. Pascagoula's 2025 use of the funds for tourism, economic development, and recreation is exactly what the statute authorizes. There is no ambiguity to interpret around.

Citations and references

Statutes:
- Local and Private Laws 2004 Ch. 1005 § 2 (Pascagoula tourism tax authorization)
- Senate Bill 3212 (2004 Regular Session)
- House Bill 1547 (2023 Regular Session) (extending repeal date to July 1, 2027)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2025/12/M.-Moore-December-23-2025-Pascagoula-Tourism-and-Economic-Development-Tax.pdf

Original opinion text

December 23, 2025

Michael R. Moore, Esq.
Attorney, City of Pascagoula
Post Office Box 1529
Pascagoula, Mississippi 39568

Re: Pascagoula Tourism and Economic Development Tax

Dear Mr. Moore:

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

Question Presented

May the funds generated by the tax authorized by House Bill No. 1547 of the 2023 Regular Legislative Session ("HB 1547" or "the bill") be used to promote tourism, economic development, and recreation?

Brief Response

Yes. The language of the bill clearly authorizes funds generated by the tax to be used "for the purpose of providing funds to promote tourism, economic development and recreation."

Applicable Law and Discussion

As an initial matter, this opinion solely addresses the intent and purpose of HB 1547 and not any subsequent actions taken in relation thereto.

Section 2 of Senate Bill No. 3212 (2004 Regular Session) authorizes the governing authorities of the City of Pascagoula to levy and collect a tax ("the tax") of up to three-percent (3%) on hotels, motels, and bed-and-breakfasts "[f]or the purpose of providing funds to promote tourism, economic development and recreation[.]" Local and Private Laws 2004 Ch. 1005 § 2.

Senate Bill No. 3212 also required a public referendum to be held prior to the implementation of the tax. According to your request, such a referendum was held, and on June 21, 2005, the Pascagoula City Council confirmed the results of the referendum, in which more than sixty-percent (60%) of the qualified electors voting in the referendum approved the tax.

As you note in your request, House Bill No. 1547 extended the date of repeal on Local and Private Laws 2004, Ch. 1005 to July 1, 2027. Thus, the authority to levy and collect the tax, and the concurrent authority to spend the funds generated by the tax on tourism, economic development, and recreation, are currently in effect.

Therefore, it is the opinion of this office that the funds generated by the tax first authorized by Local and Private Laws 2004, Ch. 1005, and most recently amended by House Bill No. 1547 of the 2023 Regular Session, may be used "[f]or the purpose of providing funds to promote tourism, economic development and recreation[.]"

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/ Caleb A. Pracht
Caleb A. Pracht
Special Assistant Attorney General