Dunagin: Recalling the black market tax

By CHARLES DUNAGIN GUEST COLUMNIST,

Many Mississippians, if given a Mississippi history test, would be just as apt to win the new Mississippi lottery as  to identify Neilah Massey Bailey.

Thanks to Emily Wagster Pettus’ recent column on the six women who have held statewide political office in Mississippi, her name was in newspapers the other day, and it evoked recollections of the black market liquor tax.

Bailey, better known in her day as Mrs. Thomas M. Bailey.  widow of a Mississippi governor, was the first woman to serve in a statewide office, being elected  state tax collector in 1947, 1951 and 1955. New State Attorney General Lynn Fitch is only the sixth.

Mrs. Bailey died in 1956 and was succeeded by William F. Winter, later to become state treasurer, lieutenant governor and governor..

Winter, a World War II veteran and legislator who was making a name for himself in politics, was appointed by Gov. J.P. Coleman and was elected to the post in 1959. He   served until 1963, advocating while holding the office that the duties should be handled by the State Tax Commission, which it ultimately was.

Reflecting on the state tax collector’s office, the primary duty of which was to collect taxes on an illegal product, is fascinating and uniquely Mississippi.

Legally, Mississippi was a dry state from national Prohibition days until 1966, but  liquor was openly sold in  parts of the state where the majority of the population tolerated it.

Counties where considerable liquor was sold included Hancock and Harrison on the Gulf Coast, Warren and Adams on the Mississippi River, several Delta counties and Rankin County, where people from Jackson would cross the Pearl River to buy whiskey.

In 1944, the Legislature passed a black market tax  and charged a state tax collector with the duty of collecting a levy on the sale of any tangible personal property, the sale of which was illegal.

Ostensibly, it was to include taxes on items such as automobile tires and other merchandise rationed during World War II that found its way into what was called a black market.

But the war was over in late 1945, and the primary duty of the state tax collector always was to collect a 10 percent tax on the retail sale of liquor. As an incentive and to pay for staff salaries and expenses, the tax collector worked on a 10 percent commission.

A Life Magazine article in 1962 asserted that Winter was the second highest paid elected official in the country, just behind the president of the United States.

His chief deputy was a former University of Southern Mississippi football player and high school coach named Otis "Shotgun" Shattles.

I always had the impression that "Shotgun"  was probably more gifted at dealing face to face with the bootleggers than the gentle appearing Winter, and I pictured him as the outside enforcer and Winter as the inside guy.

But Winter told me  in a telephone interview 20 years ago,  “We didn't need any enforcement. We had total cooperation and a smooth operation.”

He said Louisiana, which supplied most of the liquor to Mississippi, was resourceful enough to recognize a huge market in Mississippi. They exempted federally licensed dealers in Mississippi from the Louisiana sales tax, so the dealers willingly paid the Mississippi tax. “We had an agent in the department of revenue in Baton Rouge,” Winter said, and Louisiana wouldn't sell whiskey to a Mississippi dealer “we certified as not paying the Mississippi tax.”

By 1964, after Winter's term ended, the black market tax collecting duties were moved to the State Tax Commission.

In 1966, Mississippi finally became the last state in the union to repeal prohibition on a local option basis, and an Alcohol Beverage Control agency was created within the Tax Commission to regulate liquor sales.

Legalizing what was being openly sold and taxed was a hot political issue for years before 1966, but it came to a head under the strong prodding of Gov. Paul B. Johnson Jr., who happened to be a guest at the Jackson Country Club during a liquor raid.

Since then, we have legalized gambling, and there’s a move afoot to legalize marijuana, at least for medical purposes.

Some things don’t change in Mississippi, but obviously a lot evolves.

Sports

There was a lot of playoff action today for multiple Sunflower County teams across multiple sports...

Obituaries

Sue Kathy Upchurch Griffin, 72, of Inverness, passed to her eternal heavenly home after a long,... READ MORE

Breaking News

Inmates got all the way to Tennessee before capture https://bit.ly/37InwZB