Holiday tax break good for state

Published 12:00 am Thursday, April 20, 2006

Budgets behind them and not facing a midnight deadline for keeping the state's finances in order, as is the norm for the Alabama legislature, the group

pushed through a sales tax holiday for back-to-school purchases.

Shoppers can avoid paying state sales taxes on their purchases on the first Friday, Saturday or Sunday of August. In doing so, Alabama joins 12 states, including neighboring Georgia and Florida, that already have similar holidays. Tennessee's legislature recently approved that state's first tax holiday for later this year.

n In Alabama, the three-day break will cover:

n Clothing costing up to $100 per item.

n Computers, software or computer supplies costing up to $750 per item.

n School supplies and textbooks up to $50 per item.

n Other books up to $30 each.

The legislation allows cities and counties to waive their local sales taxes the same weekend, if they would like.

The Legislative Fiscal Office estimates Alabamians will save about $3.3 million annually in state taxes.

To make up part of the lost state taxes, the Senate gave final approval to a bill requiring companies that have contracts with the state for any type of supplies to start charging state and local taxes on their sales to Alabama consumers. Legislative fiscal experts said the biggest impact would be on Alabama consumers who aren't paying sales taxes now on computer equipment ordered through the Internet or catalogues, provided those computer companies have contracts with the state.

The Legislative Fiscal Office estimates the legislation will generate $1 million annually for the state and $1 million for cities and counties.

Meanhwile, the tax holiday should help families preparing to send children back to school, and should keep Alabama shoppers in state, rather than contributing to and building the economies of our neighbors.

In the long run, that's a good thing for Alabama.

– Andalusia Star News