JACKSON, Miss. (WJTV) – On Friday, April 8, 2022, U.S. District Judge Matthew Kacsmaryk agreed with Mississippi, Louisiana, and Texas that the tax mandate in the American Rescue Plan Act (ARPA) exceeds Congress’ Spending Clause authority and violated the anti-commandeering doctrine.
According to Attorney General Lynn Fitch (R-Miss.), Mississippi can pursue tax relief that was enacted by the State Legislature and utilize the federal COVID-19 funds.
“Mississippi has a surplus of funds and our Legislature should be able to give money back to the people without fear of retribution by the federal government,” said Fitch. “It is the people’s elected legislators’ right and duty to determine the best way to spur economic growth following the disruptions of the COVID-19 pandemic. They should be able to do so without heavy-handed coercion from Washington.”
The tax mandate is a provision of the American Rescue Plan Act (ARPA) that bans states from “directly or indirectly” using federal aid granted to states in ARPA for tax funds.
Under ARPA, Mississippi received nearly $2 billion in COVID-19 relief funds, which is roughly equivalent to 31% of Mississippi’s 2021 budget. Governor Reeves signed the Mississippi Tax Freedom Act into law on April 5, 2022. The new law provides more than $500 million in tax relief, eliminating the 4% tax bracket and gradually scaling back the 5% to 4% over 4 years.
Mississippi’s suit is one of six filed in federal courts challenging the tax mandate.