August sales taxes see boost

Published 10:58 am Monday, October 6, 2008

By Staff
Once again showing that cutting taxes boosts sales; Alabama's sales tax collections increase 7.28 percent in August, the month when for three days the state collected no sales tax on clothing, books, computers and school supplies of certain values.
State sales tax collections in August totaled $180,257,154.98 compared with $168,024,986.29 in august 2007, according to the Alabama Department of Revenue's September Revenue Abstract released this week, which reflects August sales tax collections. State sales tax collections year-to-date are up less than 1 percent from the same time last year, according to the latest Revenue Department figures.
The jump in August sales tax collections, the second highest recorded since January, “proves again that tax cuts stimulate business and consumer spending,” Mickey Gee, an Alabama Retail Association board member, said. “The consumer has voted with their pocket books since the sales tax holiday began in August 2006 that they know where, when and how they want to spend their money.”
Gee is also the owner of The Pants Store in Lees, Crestline Village, Trussville and Birmingham and serves as a business professor at the University of Alabama at Birmingham.
Dr. Bob Robicheaux, char of UAB's Department of Marketing and Industrial Distribution and also an ARA board member, agrees.
The Alabama Retail Association, which championed the sales tax holiday legislation in 2006, has contended since the beginning that a sales tax holiday would actually increase sales tax collections, rather than cause a loss of revenue.
This year's sales tax holiday particularly “had a momentous impact on consumer spending in our state,” Robicheaux said. “It represents significant real sales growth over price inflation and comes at a time when much of the nation is suffering setbacks rather than increases.”
Nationally, retail industry sales for August increased 1.1 percent unadjusted over last year and decreased 0.3 percent seasonally adjusted month-to-month, according to the National Retail Federation.
Unemployment in Alabama in August was at 4.9 percent.