Does a Mississippi bank have to pay the city's local business privilege tax, or does the statewide finance-company privilege tax exempt it?

Plain-English summary

The City of Collins asked whether the statewide finance-company privilege-tax exemption for "banks, state or national" also exempts a bank from the municipal privilege tax in Section 27-17-9. The AG says it does not. Section 27-21-3's exclusion applies to the statewide tax it imposes; it does not carry over to the local tax.

The local-tax question still requires a factual decision. Quoting an earlier AG opinion, Campbell, Jr., the AG says the mayor and board of aldermen must decide case by case whether a particular bank is a "business" under Section 27-17-3. If they find that it is, the bank must obtain a local privilege license and pay the tax specified in Section 27-17-9(2). The opinion does not decide that any named bank satisfies the definition.

What this means for you

Municipal tax collectors and city officials

The AG says the statewide bank exclusion does not provide an exemption from the municipal privilege tax. Before applying the local tax to a particular bank, the mayor and board of aldermen must determine whether it meets the statutory definition of "business." The opinion leaves that factual decision to them.

Banks operating within a municipality

Being excluded from Section 27-21-3's statewide finance-company tax does not itself remove a bank from Section 27-17-9's local privilege tax. The local license and tax follow if the city's mayor and aldermen determine that the bank is a business under Section 27-17-3.

Common questions

Q: Does the statewide finance-company tax exemption cover a bank's municipal privilege tax?
A: No. The AG says Section 27-21-3 exempts banks only from its statewide privilege tax, not from the local tax under Section 27-17-9.

Q: Is every bank automatically a taxable "business" under the local law?
A: The opinion does not decide that. It says whether a particular bank meets Section 27-17-3's definition is a fact question for the mayor and board of aldermen, decided case by case.

Q: What follows if the city finds that a particular bank is a business?
A: The AG says the bank must obtain a privilege license to conduct business in the municipality and pay the local tax specified in Section 27-17-9(2).

Background and statutory framework

Section 27-17-9 requires a person seeking to engage in business to obtain a municipal privilege license and pay the local tax. Section 27-17-3 defines "business" broadly, but the AG does not apply that definition to any particular bank. Section 27-21-3 separately imposes a statewide privilege tax on finance companies and excludes state and national banks. The opinion confines that exclusion to the statewide tax.

Citations and references

Statutes:

• Miss. Code Ann. § 27-17-3 (Definition of business)
• Miss. Code Ann. § 27-17-9 (Municipal privilege tax)
• Miss. Code Ann. § 27-21-3 (Finance-company statewide tax with bank exclusion)

Prior AG opinion:

• MS AG Op., Campbell, Jr. (Mar. 25, 2005) (whether a bank is a "business" under § 27-17-3 is a factual determination for the mayor and board of aldermen)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2026/03/T.-Rogers-March-30-2026-Municipal-Privilege-Tax-on-Banks.pdf

Original opinion text

March 30, 2026

Tommy Bott Rogers, Esq.
Attorney, City of Collins
Post Office Box 1415
Collins, Mississippi 39428

Re: Municipal Privilege Tax on Banks

Dear Mr. Rogers:

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

Question Presented

Is a bank located within a municipality liable for the payment of a privilege tax to the municipality under Mississippi Code Annotated Section 27-17-9, or is it exempt under Section 27-21-3?

Brief Response

Section 27-21-3 levies a statewide privilege tax on finance companies but specifically excludes "banks, state or national." It does not exempt banks from the local privilege tax mandated by Section 27-17-9.

Applicable Law and Discussion

Section 27-17-9 requires "[e]very person desiring to engage in any business" to "apply for, pay for and procure from the tax collector of the municipality, a privilege license authorizing him to engage in the business" and to pay the local privilege tax set forth in that section.

"Business" is defined as "all activities or acts, personal, professional or corporate, engaged in or caused to be engaged in with the object of gain, profit, benefit or advantage, either direct or indirect, or following or engaging in any trade, calling or profession, and all things which occupy the time, attention and labor of individuals for the purpose of a livelihood or profit." Miss. Code Ann. § 27-17-3. Whether a particular bank "constitutes a business for the purpose of obtaining a privilege license under" Section 27-17-3 "is ultimately a question of fact to be determined by the Mayor and Board of Aldermen of the City on a case by case basis." MS AG Op., Campbell, Jr. at *1 (Mar. 25, 2005). If the Mayor and Board of Aldermen determine that a particular bank constitutes a business under the definition of Section 27-17-3, the bank is required to obtain a privilege license to conduct business in the municipality and pay the local privilege tax specified in Section 27-17-9(2).

You ask whether Section 27-21-3 provides an exemption for banks from the local privilege tax set forth in Section 27-17-9. Section 27-21-3 levies a statewide privilege tax on finance companies but specifically excludes "banks, state or national." Section 27-21-3 only exempts banks from the statewide privilege tax. It does not provide an exemption for banks from the local privilege tax mandated by Section 27-17-9.

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/ Kristi D. Kennedy
Kristi D. Kennedy
Special Assistant Attorney General