Ala. tax revenue growth helps local governments during pandemic

Ala. tax revenue growth helps local governments during pandemic
Alabama tax revenue (Source: wsfa)

MONTGOMERY, Ala. (WSFA) - Alabama’s tax revenues grew by nearly 6 percent in the first half of 2020 compared to the previous year, according to the Alabama Retail Association, even with the economic downturn during the pandemic. This number includes revenue from the state sales tax and the Simplified Sellers Use Tax (SSUT).

The Simplified Sellers Use Tax is the 8 percent tax businesses collect online even though they do not have a physical location in the state. That tax is split between the state general fund and local governments in the state.

House General Fund Chairman Rep. Steve Clouse, R-Ozark, said the SSUT revenue helped hold the general fund budget together during the pandemic.

“That has really helped us basically stay even to where we thought we were going to be when we went in session back in February,” Clouse said. “So it’s sort of a pleasant surprise but things are changing. We’ll see where things go from here over the next few months.”

The SSUT revenues have been a lifeline for counties, according to Association of County Commissions of Alabama Executive Director Sonny Brasfield.

“We’re waiting for the day where we get a COVID vaccine and we can move back to regular activities for county government from a financial standpoint,” Brasfield said. “SSUT revenue is the COVID vaccine. Without that revenue, which really began in 2016, I shudder to think where county governments would be.”

Brasfield said counties primarily use the SSUT money to keep jails open and house state prisoners.

“It’s helping ensure that we can keep employees out there so that we can provide services,” he said. “Without SSUT, I’d be talking to you honestly about a huge crisis at county government.”

The Alabama Sales and Simplified Sellers Use Tax Collections did drop during March and April when the economy took a turn. But it has increased during the months of May through July.

Brasfield also believes the revenue increase compared to the previous year reflects the confidence that the people in the state have to continue purchasing during the crisis.

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