In July a new Mississippi law went into effect, one that allows churches to be exempt from paying sales tax on their utility bills, like water, gas and electricity.

Some utility companies, like Hilldale Water District on Lee Road, got in touch with churches to inform them of the new policy, which went into effect on July 1.

“They needed to know,” said Julie Eubanks, office manager at Hilldale Water. “Every little penny that can be saved helps with a church.”

Eubanks said she called each church using Hilldale Water to let them know about the new law, and she sent letters to those she was not able to contact over the phone.

Eubanks said Hilldale received a letter from the Mississippi Department of Revenue, dated June 1, explaining the new law.

The notice, which was sent to all utility companies in the state, said churches who qualify for exemption from federal income taxation are also exempt from sales tax on certain utilities.

“It saves them 7 percent,” Eubanks said. “That doesn’t sound like much, but it really adds up after a year.”

In order to receive the exemption, qualified churches must provide a copy of their 501(c)3 determination letter from the IRS or an Affidavit of Church Purchasing Utilities form to their utility company.

Commercial businesses operated by churches do not qualify for the exemption, and the church is not eligible for exemption if the business is on the same utility meter as the rest of the church.

For more information about qualifying and registering for exemption, contact a utility service provider.