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Tuesday, April 7, 2009

Panel approves bill allowing cities, counties to remove sales tax on groceries

A legislative panel approved a bill on Tuesday that, if passed, would allow cities and counties to remove their portion of the sales tax from groceries.
The Senate Governmental Affairs Committee approved the bill 5-1 with Sen. Vivian Davis Figures, D-Mobile, voting no.
The committee held a public hearing on the bill a week ago, but only two senators were left at the end of the hearing.
"I like the idea of giving local municipalities the option," said Sen. Linda Coleman, D-Birmingham.
Officials with the Alabama Education Association and the Association of County Commissions of Alabama spoke out against the bill a week ago. Opponents have said the move would take money from local government, which is used to fund education and pay the debt on building projects.
Some are also concerned that the bill allows the city or county government to determine which items are groceries and would not use the definition that is used to determine which items can be purchased with food stamps.
The sponsor, Sen. Arthur Orr, R-Decatur, said a community would determine if Twinkies or soda would be considered groceries and be exempt from the local tax.
Figures said she thought allowing different entities to determine their own definition could create chaos for retailers.
In addressing concerns about taking revenue, Orr said the legislation is permissive, only giving local government the option of removing all or a portion of their sales tax from groceries.
"Currently, under law, they don't have that choice," he said.
Orr said that in 2001 the City Council in Decatur increased the sales tax by 1 cent, but exempted groceries. He said that after the measure passed, officials realized state law does not allow cities and counties to "carve out groceries."
Senate Majority Leader Zeb Little, D-Cullman, said he thought the bill was a good idea, although he had some concerns about the legality.
"I think removing the state sales tax is an even better idea," he said.
Figures said she would like to see the bill pass that would take the state's 4-cent sales tax off of groceries. Republicans have stopped the legislation from passing the last two years, stating it would be a tax increase on the people they represent by not allowing them to deduct the federal income tax they pay from their state income taxes.


-- posted by Sebastian Kitchen

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South Union Street is the blog of Montgomery Advertiser political reporters Markeshia Ricks and Sebastian Kitchen. Always check here for the latest on the Legislature, elections and other activities and players in Alabama.

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