The Baldwin County Commission's recent elimination of sales tax on hearing aids could result in a larger revenue loss for the county than previously expected, according to State Sen. Chris Elliott (R-Josephine).
The Commission approved a tax exemption for hearing instruments on Tuesday. The resolution was effective immediately upon adoption and will remove the county tax portion.
"While I think that the reduction in sales tax on hearing aids is a good thing and have voted to do just that on the state level, I think the Commission may have unwittingly triggered the reversion outlined in ACT 2017-447 and run into conflict with their own commitments in previous commission resolutions. This seemingly small and well-intentioned action could have serious consequences for the Commission's revenue long term," Elliott told 1819 News on Wednesday.
The law renewing the county sales tax says the revenue split from the tax would change to 55% for the Baldwin County Board of Education and 40% to the county's general fund if the tax is rescinded, repealed, or discontinued.
"The question is, does the removal of a portion of this levy trigger the reversion to previous distribution percentages in Act 2017-447 and does the removal of a portion of the levy conflict with the Commission's own Resolutions," Elliott said. "The legislative tax that passed the last time it was renewed the school system I think wisely argued that there should be some language in there that the split would revert back to a previous negotiated split if the county ever changed or stopped collecting a portion of the county levied tax. The legislative levied tax has a 55-45% split between the county and the school system with the county getting the larger portion of that. So, the statute basically says if the county doesn't collect the tax then that could revert back to the 55-45% the other way. The question now with the county taking this action is: does that trigger the reversion in the local law? I don't know what the county was taking in on the hearing aid taxes and I don't have any problem certainly with them cutting taxes. I'm a small government, cut taxes kind of guy. I'm worried the unintended consequences might be they've triggered a reversion and they could lose $10 to $15 million dollars in revenue that was going to the county over, you know, I don't know what they were collecting on sales taxes on hearing aids, it might be $50,000 a year or something like that countywide. They may have really gotten themselves in a pickle."
The Baldwin County Board of Education said in a resolution passed last week that they have "great concerns" about new sales tax exemptions for public education, but they didn't object to the hearing aid sales tax exemption.
The resolution stated, "$0.024 of Baldwin County's 3-cent sales taxes ("school taxes") are not taxes levied for the Baldwin County Commission, but rather, are educational sales taxes levied by the County Commission on behalf of the School Board, an agency of the State of Alabama, for public school purposes."
The resolution stated, "On previous and several occasions, by formally adopted resolutions, the Baldwin County Commission has covenanted, agreed, and pledged in good faith these School taxes levied on behalf of the Baldwin County BOE for the Baldwin County BOE's capital and operational expenses and indebtedness."
"The Baldwin County BOE does have great concerns about any further exemptions or reductions of taxes levied for the purpose of public education, we are greatly appreciative, however, of County Commissioner Ball's discussion with us and his request for our consideration," the resolution continued. "The Baldwin County BOE hereby notifies the Baldwin County Commission that we have no objection to the Commission adopting the specific exemption for hearing instruments. The Baldwin County BOE reserves the right to object and take any steps necessary on any future exemptions."
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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