As most of the state was idling in a deep freeze in mid-January, Alabama’s lawmakers were meeting in Montgomery for a six-week session to tackle a host of topics. Anytime legislators gather, Huntsville leaders keep a close watch on bills of interest. Here’s what’s tops on their list:
Internet sales tax
There is a name for the phenomenon: The Amazon Effect.
Online shoppers don’t pay sales tax at the time of purchase, though they are obligated to self-report on income tax forms how much they have spent online. In reality, most do not.
‘E-tail’ shopping, as it is currently set up, reduces local tax revenue.
“It puts companies that have invested in this community with brick-and-mortar stores, who have become the fabric of the community, at a disadvantage to some entity across the country that’s not paying for roads, paying for public safety; that, quite frankly, is not paying its fair share,” said Harrison Diamond, the City’s Business Relations Officer. “When you shop local, the businesses are collecting sales tax (nine percent in the city),” he said. “For a big purchase, that’s not a nominal fee.”
The Alabama Legislature worked to level the playing field in 2015 by creating a Simplified Sellers Use Tax (SSUT). It allows retailers that don’t have a store in the state to voluntarily collect eight percent sales tax when delivering products to Alabama customers. Of the eight percent, four percent of sales taxes collected go to the State General Fund and four percent is shared by cities and counties, based upon population. The growing fear is that a new bill might be passed in the legislature to “grandfather” online merchants, at the same low rate, should they decide to establish a brick-and-mortar presence.
“What we’d really like to see lawmakers do on the SSUT is close a couple of little loopholes,” said Diamond. “That’s all.”
The popular ride-sharing companies that utilize private vehicles and drivers have urged statewide legislation that would take away local authority. Ride-sharing companies are lobbying for a one-size fits all approach that works in every city in the country.
“We understand these companies have to grow, and having to go through every single municipality individually would be difficult,” Diamond said. “However, we’re responsible for public safety. We want to make sure the drivers are going to be safe and the automobile is fit for service.”
Representatives from the state’s largest cities (Huntsville, Mobile, Birmingham, Tuscaloosa, and Montgomery) have expressed their concerns with ridesharing companies Lyft and UBER and say they’re comfortable with a bill that protects riders while allowing the businesses to scale.
Airbnb and VRBO have become popular with homeowners and travelers. Huntsville recognizes the legislature is walking a thin line on the issue, between home-owners who might occasionally rent a home or apartment to out-of-towners and those who make it a common practice or who are buying up properties for the sole reason of short-term rentals.
“We’re hearing from neighborhoods that are concerned about home-sharing companies, and rightfully so,” Diamond said. “They want to know who their neighbors are. They don’t want to be next to a revolving door. We have zoning laws that don’t allow commercial enterprise.”
Private home-sharing is not subject to the lodging taxes that hotels are required to pay, and those taxes have been important funding mechanisms that allow the City of Huntsville to support needed projects like renovations to the Von Braun Center. The Lodging Tax is also vital for important community organizations like the Huntsville/Madison County Convention & Visitors Bureau and the Huntsville Sports Commission.
Look for this topic to be an ongoing conversation as Huntsville and municipalities across the state look at ordinances and new legislation to tackle this growing business model.
One of Madison County’s legislators, State Sen. Arthur Orr, was able to usher a new bill through Alabama Senate this session that had its genesis in conversations with North Alabama community leaders.
Orr sponsored an economic development bill that will allow county commissions the autonomy to abate rollback taxes.
Hitting close to home, it could otherwise have been a stumbling block in the recent Toyota-Mazda deal, which Mayor Tommy Battle was able to finalize the next day in a development agreement.
“We’re hardly the only area that has asked for relief from the ‘rollback’ taxes that are obstacles for potential investors in our communities,” Battle said. “But it’s something we’ve talked with Senator Orr and others about and they’ve seen the importance of this bill.”
The “rollback” tax is levied on the investor after a rezoning from agriculture to industrial. Battle and others believe this is an immediate hurdle for the investor that might affect its interest. The tax revenue could actually be much greater once a business is up and running.
In the Alabama House, Speaker Mac McCutcheon and Rep. Danny Crawford are championing the companion bill.
Battle stressed that communication and relationship-building with the Huntsville-area legislative members has historically been positive and productive.
“They’re always very open to our needs and willing to work with us,” said Diamond. “They’re wonderful partners,” he said of the seven representatives and five senators whose districts are inside of or reach into Huntsville City Limits. (One District seat remains unfilled after the death last fall of Rep. Jim Patterson.)
The 2018 session opened Jan. 2 – and will close Feb. 9 (in non-election years it opens in February).
Members of the Madison County Legislative Delegation will be holding an open forum to meet with citizens on Feb. 5, at 7 p.m., in the City Council Chambers, 308 Fountain Avenue.
House of Representatives
Mike Ball (R), District 10: firstname.lastname@example.org
Committees: Ethics and Campaign Finance (Chairperson), Judiciary, Madison County Legislation (Chairperson)
Anthony Daniels (D), District 53 and House Minority Leader: email@example.com
Committees: Education, Rules, Insurance, Madison County Legislation
Laura Hall (D), District 19: firstname.lastname@example.org
Committees: Health, Internal Affairs, Ways and Means, General Fund (Ranking Minority Member), Madison County Legislation (Vice Chair)
Mac McCutcheon (R), District 25 and Speaker of the House: email@example.com
Committees: Limestone County Legislation, Madison County Legislation
Howard Sanderford (R), District 20: firstname.lastname@example.org
Committees: Boards and Agencies Commissions (Chairperson), Constitution Campaigns and Elections, Internal Affairs, Technology and Research (Vice Chairperson), Madison County Legislation.
Ritchie Whorton (R), District 22: email@example.com
Committees: Commerce and Small Business, Economic Development and Tourism, Ethics and Campaign Finance, Madison County Legislation
Phil Williams (R) District 6: firstname.lastname@example.org
Committees: Education Policy (Vice Chair), Technology and Research, Ways and Means Education, Madison County Legislation, Limestone County Legislation
(The District 21 seat is vacant after the death last fall of Jim Patterson. An election for the seat is March 27, between Democrat Terry Jones and Republican Rex Reynolds.)
Bill Holtzclaw (R) District 2: email@example.com
Committees: Banking and Insurance, County and Municipal Government, Finance and Taxation General Fund, Transportation & Energy, Veterans and Military Affairs (Chairperson) Madison County Legislation
Steve Livingston (R) District 8: firstname.lastname@example.org
Committees: Agriculture Conservation and Forestry, Finance and Taxation General Fund, Fiscal Responsibility and Economic Development, Transportation & Energy, Veterans and Military Affairs, Madison County Legislation
Tim Melson (R) District 1: email@example.com
Committees: Agriculture Conservation and Forestry, Constitution Ethics and Elections, County and Municipal Government, Finance and Taxation General Fund, Health and Human Services, Fiscal Responsibility and Economic Development, Tourism and Marketing, Madison County Legislation
Arthur Orr (R), District 3: firstname.lastname@example.org
Committees: Confirmations, Finance and Taxation Education (Chairman), Finance and Taxation General Fund, Fiscal Responsibility and Economic Development, Governmental Affairs, Judiciary, Rules, Transportation & Energy, Madison County Legislative
Paul Sanford (R), District 7: email@example.com
Committees: Agriculture, Conservation and Forestry, Banking and Insurance, County and Municipal Government (Chairperson), Finance and Taxation General Fund, Fiscal Responsibility and Economic Development, Governmental Affairs, Rules, Tourism and Marketing, Madison County Legislative (Chairman)
Clay Scofield (R) District 9: firstname.lastname@example.org
Committees: Agriculture Conservation and Forestry, Banking, Confirmations (Chairperson), County and Municipal Government, Fiscal Responsibility and Economic Development, Governmental Affairs, Rules, Transportation & Energy, Judicial, Madison County Legislative