Local News

Senate bill could spell trouble for Mobile tax revenue

MOBILE, Ala. (WKRG) - Mobile city officials are calling it a 'money grab' by the state.  Senate Bill 130 would change the structure of a program known as the Simplified Sellers Use Tax (SSUT).  That program allows online retailers that don't have brick and mortar stores in the state to opt-in to pay a reduced 8 percent state sales tax instead of 10 percent.  The new Senate Bill would change that.

"It's going to divert taxes that are presently coming to the city--it will redistribute them in a way where the county will get more and the state of Alabama will get more," said Mobile Mayor Sandy Stimpson.

If passed, the bill would allow online sellers that do have brick and mortar stores here to opt into the program as well, meaning retailers like Amazon and Walmart, which do have physical stores here, to reduce their taxes by opting into the program and paying the 8 percent sales tax instead of 10 percent.  That would result in the loss of millions in revenue for Mobile and other Alabama cities.

City officials estimate the city could lose some $11m in sales tax revenue per year.

"Capital improvement projects could go away---and all the improvements we have made over the last three years and looking to make in the next four to ten years could be on hold," said Councilwoman Gina Gregory.

Mayor Stimpson added, "There will have to be city expenses cut if this happens to us."

The City Council passed a resolution opposing SB130 and plan to further lobby legislators against it.


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