Feelings about Online Sales Tax in Alabama (Huntsville, Madison: how much, income)

[MisterEd51]

What does everyone else think about paying the online sales tax? I think that it was inevitable since states like Alabama depend heavily upon the revenue generated by sales taxes.

Online retailers with in-state sales of $200,000 or more now must register with the Alabama Department of Revenue then collect and remit the 8% sales taxes. If the local sales taxes are less then 8%, like Madison County which has a 4.5% sales tax, then people can get a refund of the difference at the end of the year.

People were always supposed to pay the sales taxes for online retailers. If it wasn't paid at the time of sales there was a place to declare it on the state tax forms. I bet few probably did.

Even though the larger online retailers are now collecting the sales for Alabama I am sure that we are still required to declare the taxes on our tax forms if the they are not collected by smaller online retailers.

Alabama’s online sales tax brought in additional $12 million during holidays

[jewel104]

For me, I loved online shopping when, if the store was not located in my zip code, there was zero tax.

[harry chickpea]

*shrug* It was inevitable. It levels the playing field a little bit for local business, raises revenue without new taxes. Government allowed for faster development of the internet by not pushing the tax issue. Government gave land to railroad companies to promote westward development. Government subsidizes or stays out of the way of areas where it wants growth. Once that is achieved, it harvests taxes or eliminates supports.

[RocketDawg]

You were supposed to report it on your state tax return, and pay the sales taxes, but I'll bet few if any actually did it.

I have no problem with it. The government has to have funding with which to operate, and they were losing a lot to online sales.

[Preston3124]

Originally Posted by MisterEd51

What does everyone else think about paying the online sales tax? I think that it was inevitable since states like Alabama depend heavily upon the revenue generated by sales taxes.

Online retailers with in-state sales of $200,000 or more now must register with the Alabama Department of Revenue then collect and remit the 8% sales taxes. If the local sales taxes are less then 8%, like Madison County which has a 4.5% sales tax, then people can get a refund of the difference at the end of the year.

People were always supposed to pay the sales taxes for online retailers. If it wasn't paid at the time of sales there was a place to declare it on the state tax forms. I bet few probably did.

Even though the larger online retailers are now collecting the sales for Alabama I am sure that we are still required to declare the taxes on our tax forms if the they are not collected by smaller online retailers.

Alabama’s online sales tax brought in additional $12 million during holidays

The article says the following-

The SSUT allows merchants to pay a flat 8 percent sales tax and avoid navigating the more than 200 different city and county rates across the state. Of the 8 percent, 60 percent goes to municipalities and 40 percent to counties, based on population.

Does that mean that none of it goes to the state?

[Teko03]

I'd be fine with it...if this state would first allow citizens to willingly GIVE them tax dollars via a lottery before increasing an already crazy sales tax rate. Alabama has the 4th highest sales tax once you factor in city and county taxes. I'd love to see the hard numbers on how much money is lost each year due to in-state earned income being donated to Georgia, Tennessee, Florida, Louisiana & soon Mississippi.

[RocketDawg]

Originally Posted by Teko03

I'd be fine with it...if this state would first allow citizens to willingly GIVE them tax dollars via a lottery before increasing an already crazy sales tax rate. Alabama has the 4th highest sales tax once you factor in city and county taxes. I'd love to see the hard numbers on how much money is lost each year due to in-state earned income being donated to Georgia, Tennessee, Florida, Louisiana & soon Mississippi.

Good point, and hopefully that situation will be rectified soon.

[MisterEd51]

Originally Posted by Preston3124

The article says the following-

The SSUT allows merchants to pay a flat 8 percent sales tax and avoid navigating the more than 200 different city and county rates across the state. Of the 8 percent, 60 percent goes to municipalities and 40 percent to counties, based on population.

Does that mean that none of it goes to the state?

"Of the 8 percent, 4 percent goes to the state's coffers, 2 percent goes to counties and 2 percent to cities, with the county and city shares prorated for population."

Simplified Seller's Use Tax Disbursements (01-01-18 to 12-31-18)
Huntsville = $1,333,266.73
Madison = $317,857.94
Madison County = $1,498,016.48

Simplified Seller's Use Tax Disbursements (01-01-19 to 2-28-19)
Huntsville = $451,556.66
Madison = $107,653.53
Madison County = $507,354.82

With that much disbursed in only two months the totals for 2019 could easily double that for 2018.

How much Alabama – and your city – has received through online sales taxes
https://www.al.com/news/2018/11/how-...les-taxes.html

Simplified Sellers Use Tax (SSUT)
https://revenue.alabama.gov/sales-us...-use-tax-ssut/

[MisterEd51]

Originally Posted by Teko03

I'd be fine with it...if this state would first allow citizens to willingly GIVE them tax dollars via a lottery before increasing an already crazy sales tax rate. Alabama has the 4th highest sales tax once you factor in city and county taxes. I'd love to see the hard numbers on how much money is lost each year due to in-state earned income being donated to Georgia, Tennessee, Florida, Louisiana & soon Mississippi.

States with lower sales taxes just have other ways to collect taxes. For example a lot of states have much higher property taxes than Alabama. The same goes for state income taxes.

Lotteries are no panacea. I remember one state starting a lottery for education. I bet after the lottery started the education total budget did not increase that much. In other words after lottery money started going to education the money that would have gone to education from the state budget got spent on other things.

The lottery Is a Tax — An Inefficient, Regressive and Exploitative Tax
https://www.huffingtonpost.com/max-g...b_8081192.html

[RocketDawg]

Originally Posted by MisterEd51

"Of the 8 percent, 4 percent goes to the state's coffers, 2 percent goes to counties and 2 percent to cities, with the county and city shares prorated for population."

Simplified Seller's Use Tax Disbursements (01-01-18 to 12-31-18)
Huntsville = $1,333,266.73
Madison = $317,857.94
Madison County = $1,498,016.48

Simplified Seller's Use Tax Disbursements (01-01-19 to 2-28-19)
Huntsville = $451,556.66
Madison = $107,653.53
Madison County = $507,354.82

With that much disbursed in only two months the totals for 2019 could easily double that for 2018.

How much Alabama – and your city – has received through online sales taxes
https://www.al.com/news/2018/11/how-...les-taxes.html

Simplified Sellers Use Tax (SSUT)
https://revenue.alabama.gov/sales-us...-use-tax-ssut/

Madison is coming out ahead on this way of disbursing. Huntsville is about 4 times the size of Madison, but has over 7 times the retail sales of Madison (according to the Census bureau, 2012 data on sales).