Should cities and counties be allowed to remove their portion of the sales tax on groceries?
The Senate Governmental Affairs Committee held a public hearing on a bill that would allow cities and counties to remove their portion of the sales tax on groceries, but did not vote. The public hearing was at the end of the committee meeting and only two senators, Democrats Larry Means of Attalla and Bobby Denton of Muscle Shoals were present at the end of the meeting.
Several people expressed concerns about allowing the different entities to determine which items are food.
Sonny Brasfield, executive director of the Association of County Commissions of Alabama, spoke against the bill. He said everyone uses the same definition of food and, according to the bill, an item such as cookies could be exempt in one community and not in another. He also said the counties would not have a way to replace the revenue.
Keith Seagle, a city commissioner in Dothan, and the sponsor, Republican Sen. Arthur Orr of Decatur, said they supported the communities being allowed to decide if they wanted to remove the tax.
Seagle said cities do not have the money for grants to help families, but he said officials "can set local taxes in accordance with local needs."
"Everyone realizes taxing food is wrong and something needs to be done about it," he said.
Seagle said the change would allow cities and counties to decide the fate of taxes in the community without going to the Legislature.
Susan Kennedy, speaking for the Alabama Education Association, said many communities use sales tax for teachers and to repay bonds that help to fund building projects.
Orr said people talked about lost revenue, but his bill gives local government the option.
The senator said that several years ago the City Council in Decatur voted to raise the sales tax by 1 cent, but to exempt groceries. Orr said the city attorney eventually discovered that the city could not exempt groceries.
Senators on the committee did not ask any questions about the bill.
Removing the sales tax from groceries has been a controversial topic during the last two legislative sessions with Democrats pushing for the removal. Republicans have said they do not oppose removing the sales tax, but are opposed to replacing the revenue by burdening the wealthier Alabamians they represent. The Democratic proposal would replace the revenue by not allowing people above a certain income level to claim the federal income taxes they pay on their state income taxes.
-- posted by Sebastian Kitchen