Strengthened online sales tax law bringing new revenue for local cities

Strengthened online sales tax law bringing new revenue for local cities

HUNTSVILLE, Ala. (WAFF) - 'Tis the season to spend that money.

Thanks to a strengthened Alabama law, this year sales dollars aren’t leaving the Yellowhammer state.

In 2018, the state legislature required all out of state online sellers to remit an 8 percent sales tax (while previously it had be voluntary).

Since January, all sellers doing more than $250,000 in business have been required to pay.

As a result, state revenue from the tax is up, meaning disbursements to local cities are on the rise.

Madison pulled in $102,463.98 in October 2019, quadrupling the October 2018 disbursement.

Madison City Administrator Marc Jacobson said it’s been a windfall.

“Some of it we knew was coming. In the last few months it’s really bumped up in a way we couldn’t anticipate,” he said.

So far, the state has given almost $917,000 to Madison.

$130,000 has gone to Madison City Schools, while the rest goes where needed.

“There are always projects on the table that go could be roads, it could be intersections, we have a list,” he said.

In October, Huntsville pulled in $430,000, Decatur $133,000, and Athens $52,000.

It’s not just the public sector benefiting either.

Nancy Dennis with the Alabama Retail association said the law is leveling the tax burden behind the big corporations and local shops.

“[The shops] were at a competitive disadvantage. They couldn’t compete,” she said.

Her organization supports the law, and wants it to go further.

“To try to raise that rate so that there’s a completely level playing field,” she said.

So if you're shopping online or braving the crowds, know your city is cashing in.

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