MONTGOMERY — The House of Representatives voted Tuesday to approve a pair of tax-related bills while delaying voting on legislation to raise the state's internet sales tax.
House Bill 258 (HB258), sponsored by State Rep. Chris England (D-Tuscaloosa), would match the tax collected by online retailers, also called the Simplified Sellers Use Tax (SSUT), to the current cumulative sales tax rate in Alabama.
HB258 relies on the passage of House Bill 257 by State Rep. Joe Lovvorn (R-Auburn), which creates the one-day sales tax holiday. Neither bill will go into effect without the passage of the other.
Currently, state tax imposes a 4% sales tax for retailers. County and municipal taxes bring the state's average sales tax rate to 9.3%.
The online tax rate would be recalculated every five years, but the initial increase would be 1.33%. The fiscal note attached to the bill calculated $121 million in extra state revenue. Sixty-five percent of the revenue would go to municipalities, with a preference for areas with a population of 50,000 or more, 15% would go to counties, and 20% would go to the Alabama State Department of Education.
In an unusual occurrence, the House voted unanimously to approve Lovvorn's tax holiday while voting to call England's bill over to the call of the chair.
The tax holiday would apply to boating, camping, fishing, hunting, outdoor supplies, gun safes and sports and recreation supplies. The bill would exclusively relate to state taxes. However, municipalities would have the option to opt in for the holiday.
Some members recommended that the tax holiday be limited only to Alabama residents, insinuating that neighboring states could take advantage of it. Despite the slight critiques, Lovvorn's bill passed with a unanimous vote.
When England's bill came on the House floor, Lovvorn motioned to place it on the table while they "try to get all the input from the agencies and those who are participating" in crafting the bill.
Legislators who oppose tax increases were expected to resist in the House. Some House members told 1819 News the legislation had decent chances of passing, while others thought a failure was equally likely.
Several members of the Senate told 1819 News that the bill would face an uphill battle should it pass the House.
To connect with the author of this story or to comment, email craig.monger@1819news.com.
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