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Sales taxes up in November

Sales tax collections for the month of November were up for the city of Andalusia and down only slightly for Covington County when compared to the same period last year.

Those numbers are strong when compared to reports earlier this week that Alabama’s sales tax collections dropped nearly 10 percent from the same period a year earlier.

Andalusia city clerk and treasurer John Thompson said sales tax collections for purchases made in November were up more than 5 percent when compared to the same period last year.

November 2008 collections totalled $368,902, a figure that is $18,780 higher than the same period last year. Sales taxes collected in the first two months of the fiscal year (October and November) for purchases made in September and October, were down compared to the same period last year.

“We’re still off somewhat for Fiscal Year 2009, but this certainly reduces that amount,” Thompson said. “We’re hopeful that holiday sales were good and that the new administration will soon have a robust stimulus package in place that will jump start our economy.”

Sales taxes collected for the county for November 2008 were $572,122, or $10,019 less than the same period last year.

Tax collection figures have huge consequences because they fund much of local government operations.

The Associated Press reported earlier this week that while sales taxes were down in Alabama in the first quarter, beer tax collections were up 4 percent. Individual income tax collections were nearly level for the first quarter.

Those figures show Alabamians are still working and having income taxes withheld from their paychecks, but they are spending less.

“A lot of discretionary spending is being trimmed,” said Mickey Gee, a marketing professor at the University of Alabama at Birmingham. He attributes that to declining consumer confidence due to job losses and the fear of job losses.

In Alabama, stores send sales taxes to the state in the month after they are collected. That means the sales taxes collected by stores in December — and the outcome of the Christmas shopping season — will not be available in Montgomery until later this month.