Alabama – Falling Tax Revenue Looms for State, Counties, Cities

With most restaurants, hotels and retail businesses either shut down or seeing little customer traffic, government officials expect a sharp decrease April 20 when they receive March sales and lodging taxes. The notable exceptions are sales taxes from grocery stores and online merchants.

Collection of sales and lodging tax is a hodgepodge system. The state collects its own revenue. Cities and counties can let the state collect their taxes, collect their own taxes or use a third-party vendor.

Financial outlooks turned 180 degrees from what had been a thriving economy for the state of Alabama. The state Legislature has gone from expecting to adopt the largest budgets in history to possibly making cuts.

The state’s commitment to collecting internet taxes accompanies online sales that have increased during the pandemic as people turn to home delivery to slow the spread of the coronavirus. Amazon recently announced it is hiring 100,000 additional workers to handle the increased demand. Another modest bright spot may be taxes collected on sales at grocery stores. Grocery stores are having a difficult time keeping up with demand. During the week ended March 20, preliminary unemployment claims jumped to about 9,300 from 1,400 the week before.

For more Information: WBHM

by scott morris
april 2, 2020