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 says the funds are for tourism, economic development, and recreation, the AG confirms those statutory purposes. It expressly says the opinion "solely addresses the intent and purpose of HB 1547 and not any subsequent actions taken in relation thereto."

The opinion does not assess any particular city expenditure. It confirms the three purposes listed in the authorizing law without deciding whether a specific project fits them.

What this means for you

Pascagoula city staff handling the tourism tax

The opinion holds the funds may be used "for the purpose of providing funds to promote tourism, economic development and recreation," the language of the authorizing law. It notes that H.B. 1547 extended the repeal date of Local and Private Laws 2004, Ch. 1005 to July 1, 2027, so the authority to levy the tax and spend the funds is currently in effect. The opinion expressly addresses only the intent and purpose of the law, not any past actions taken under it.

Pascagoula hotel, motel, and B&B operators

Under the opinion, the 3% lodging tax rests on the 2004 local and private law (Senate Bill 3212), was approved by more than 60% of voters in the June 2005 referendum, and remains in effect through the July 1, 2027 repeal date set by H.B. 1547.

City tourism bureau and economic development directors

The opinion confirms tourism, economic development, and recreation are the statutory purposes for the funds. It does not address how the city should allocate among those purposes.

Citizens and taxpayers in Pascagoula

The opinion describes the tax as a 3% levy on hotels, motels, and bed-and-breakfasts approved by referendum in 2005, currently authorized through July 1, 2027, for tourism, economic development, and recreation. It declines to opine on any specific past expenditure.

Local-and-private-law drafters

The opinion traces how the original 2004 law set the tax and its purposes and how H.B. 1547 (2023) extended the repeal date to July 1, 2027 without changing those purposes.

Common questions

Q: How is this different from a state-level tourism tax?
A: The tax authority discussed here comes from Local and Private Laws 2004, Ch. 1005, which authorizes Pascagoula's governing authorities to levy the specified lodging tax.

Q: When does this tax authority expire?
A: The opinion says H.B. 1547 extended the repeal date of the 2004 local law to July 1, 2027. It addresses the tax authority as it stood on the opinion's December 2025 issue date.

Q: What if Pascagoula wants to use the funds for something else, like a city building?
A: The AG confirms that the tax proceeds may be spent to promote tourism, economic development, and recreation. It does not decide whether any particular building project would fit those purposes.

Q: Did voters have to approve this tax?
A: The 2004 law required a public referendum before the tax could be implemented. According to the city's request, the City Council confirmed on June 21, 2005, that more than 60% of qualified electors voting had approved it. The opinion does not discuss whether a later extension needed another vote.

Q: Can other Mississippi cities do the same thing?
A: The opinion addresses the local and private law authorizing Pascagoula's tax. It does not address taxing authority for other cities.

Background and statutory framework

The opinion traces Pascagoula's authority from a 2004 local and private law to the 2023 bill extending that law's repeal date.

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.

H.B. 1547 extended the repeal date to July 1, 2027. The AG says the authority to levy and collect the tax, and the concurrent authority to spend its proceeds on the listed purposes, were in effect when the opinion was issued.

The AG reads the authorizing language as permitting spending "[f]or the purpose of providing funds to promote tourism, economic development and recreation[.]" It expressly excludes subsequent actions taken under H.B. 1547 from its answer.

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