Darrin Webb, the state economist, and other financial experts in Mississippi project that use tax revenue to the general fund for core state functions like education, law enforcement, and health care will slow down or even decrease this fiscal year. According to data compiled by staff from the Legislative Budget Committee, use tax collections to the state general fund have dropped $3.5 million to $117.7 millions through November or the first five months in the current fiscal year. According to financial experts, the Legislature receives projections on how much revenue it will collect. This is causing a decline in use tax collections for core state functions. Webb informed legislative leaders and Gov. that the increased diversions for infrastructure will result in a reduction in tax collections. Phil Bryant in November. Webb cites legislation that was passed during the 2018 session in order to divert tax revenue from core state functions to local needs. In an effort to avoid increasing the motor fuel tax to fund infrastructure costs, lawmakers voted to phase out the redirection of 35 percent of use tax revenue to local needs. The diversion, which will be fully enacted in the coming years, will transfer approximately $120 million annually from the state to local governments. This amount will continue to grow over time. The use tax is a 7. percent tax on products purchased outside of the state, such online or via catalog sales. The main reason why the use tax is increasing is because the U.S. Supreme Court ruled in June 2018 that states can levy a sales or use tax on internet purchases. Because sales from brick-and-mortar stores have declined or stopped in recent years, the Supreme Court’s decision was crucial. While sales tax revenue has declined in recent years, use tax revenue overall has increased. However, Mississippi’s single largest source for revenue is still the sales tax collected from retail shops. Wells Fargo Securities Economic Group released a late October report that stated, “For Christmas, non-store retailers will likely surpass general merchandise and grocery stores as the largest source of holiday spending.” In the last fiscal year ending June 30, sales tax collections for Mississippi were up 24% to $419.6 Million, while sales tax collections grew 2.6 percent to $3.2 Billion. Through November, sales tax collections have grown at a rate of 2.6 percent in the first five months. This fiscal year, the use tax collection has increased 8.9% to $173million. However, a greater portion of the use tax collections are being used to pay for local services rather than state services.