Internet sales tax boosts Pike County revenue

Published 3:00 am Thursday, June 21, 2018

Sales tax revenue is up in Pike County thanks to a relatively new stream of revenue making strides.

Interim administrator McKenzie Wilson said the typical sales tax that the county receives – 0.25 cents on every dollar – is actually down slightly from this time last year, but revenue from simplified sellers use tax (SSUT) from internet sales is up 50 percent over last year, leading to a net increase in revenue.

“Last year we had $90,000 in revenue from the internet tax,” Wilson said. “This year, we’re already at that number with four months to go.”

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At the same time last year, the county had only collected $45,000 from the new tax revenue stream.

The simplified sellers use tax, passed in 2015, allows companies selling to Alabama customers without a physical presence in the state to collect sales tax to be remitted to the government in exchange for a locked rate of 8 percent regardless of any changes in federal law that could allow for a higher rate.

It also ignores varying county and municipality rates for the one simple fee.

Amazon notably began participating in the program in November 2017, just after the start of the fiscal year.

The addition of Amazon collecting tax didn’t show up immediately for the county – the tax revenue actually dropped from $9,845 in October to $8,998 in November – but the numbers then climbed past $13,000 in January and have not dropped below $10,000 since then.

In the prior year, only seven months generated revenue while more online retailers joined the program.

Meanwhile, the sales tax revenue from brick-and-mortar stores compared to last year dropped slightly.

At this point last year, the county had brought in just over $609,000 sales tax revenue compared to $587,000 this year, a drop of 3.6 percent.

Wilson said it’s hard to pinpoint why the tax revenue would drop.

The year got off to a rough start with lower revenues being brought in three of the first four months, falling behind approximately $25,000 from last year’s numbers.

The revenue has been rebounding since February, either on pace with last year’s numbers or slightly ahead.

Overall, the county has raised $677,385.75 through the first eight months of the fiscal year, a 3 percent increase over the $654,237.88 at the same point last year.

Wilson projects that the final revenue is projected to be 12 percent higher than the commission budgeted to have. The commission budgeted for $895,000 in revenue, but Wilson said current projections are for the county to bring in nearly $1.015 million.

These numbers do not include the temporary tax created to fund the construction of a new jail or jail complex in the county. The tax, implemented at the beginning of the fiscal year, has brought in $2.353 million so far. The revenue is dedicated solely for costs related to the construction of the Pike County Jail.