Ala. tax numbers during first full month of pandemic offer hope, April down 4.5%

MONTGOMERY, Ala. (WSFA) - Alabama taxes remitted by sellers located in and outside the state declined almost 4.5 percent in April compared with the same month last year.

The month of April was particularly difficult financially for sales-dependent businesses across Alabama. The pandemic forced some to close their doors and others to alter the way they do business.

Less people shopping locally was reflected in the state’s sales tax collections for the month of April. It was down 12.36 percent compared to last year, while collections remitted through the simplified sellers use tax, remote and primarily online retailers, was up by 84.3 percent doubling from last year according to the Alabama Department of Revenue’s May abstract.

“For the numbers to be down 4.5 percent or even 12 percent for regular sales tax numbers that’s encouraging because they didn’t fall off a cliff,” said Nancy Dennis Director of Public Relations for the Alabama Retail Association.

And for the first four months of 2020, the combination of those two sales tax sources grew .21 percent over the first four months of 2019.

“So the actual money coming into the state is actually up a little bit,” said Dennis.

It’s up, however, because most people are shopping online.

“What it points out is it’s even more important that you shop at local retailers like these here on Mulberry Street because that money comes back to your community,” Dennis said.

Businesses like Al’s Flowers are still continuing to struggle.

“It [the pandemic] has really affected every aspect of our business,” said Al Cantrell, owner of Al’s Flowers.

“Small businesses pay the most taxes and we keep the city running and I don’t think people realize that,” Cantrell said. “We’re what keeps the street paved and the sanitation workers working and all the functions.”

“It is more important than ever to shop local, whether you shop in store or online,” said Alabama Retail President Rick Brown of the latest numbers available on taxed purchases in a statement. “When you shop local, your money remains in your community, it turns over numerous times and it keeps local businesses open and contributing to their communities.”

The Alabama Revenue Department’s monthly abstract reflects sales tax collections on general merchandise, restaurant and other food service, automobiles, machinery and vending. Collections made through the state’s simplified sellers use tax is a separate line item on the abstract. The Alabama Retail Association combines the two collection sources to get a better indicator of overall taxed spending in our state.

The numbers reported in the monthly abstract include only payments received during a particular month, according to the Alabama Revenue Department. For the months of February, March and April, the department allowed certain small retailers and restaurants to wait until as late as June 1 to remit sales taxes due without a late penalty.

Alabama retailers such as grocery stores, home improvement/hardware stores and pharmacies that were open reported good sales to Alabama Retail, but most retailers were closed throughout the month of April, operating only through curbside, delivery and online fulfillment. Throughout April, restaurants and bars operated only through curbside and delivery. Retailers were able to open under half capacity May 1 and restaurants could open with tables 6-feet apart May 11.

Tax collections from May sales won’t be on state abstracts until July or even August.