Commission proceeds to fix tax issues

Published 12:00 am Thursday, April 14, 2016

 

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To avoid being sued, the county commission on Wednesday agreed to let the commission chairman and the administrator look at the tax figures and see the best way to bring certain taxes in line with each other.

In December, the commission learned that it needed to reduce the county’s sales-and-use tax and increase its sales tax.

Then-county attorney Stacy Brooks presented the advice to the commission.

At that meeting, she told the governing body that Covington County – as well as many other counties in Alabama – had been notified by the Alabama Department of Revenue that the U.S. Supreme Court ruled in a Missouri case that having higher use tax than sales tax is a violation of the Commerce Clause of the U.S. Constitution.

For instance, county administrator Karen Sowell explained in December, the county receives payments from Amazon, the online retailer, for purchases made by Covington County residents. When people purchase tags for automobiles purchased out of town, they also pay taxes, she said. And when companies purchase equipment and construction materials, they self report the taxes owed. RDS, which collects sales taxes for the county, also monitors those kinds of purchases, she said.

At Wednesday’s meeting, Sowell told commissioners they had a couple options: do nothing or try to figure out the best way to equalize the taxes by doing the smallest amount of change.

Sowell told them there was no time frame given from the suggestion from the Department of Revenue.

Mark Christensen, who was acting as the county’s attorney Wednesday, said that if the county was taken to court, they could be forced to rebate all taxes.

Now, Chairman Bill Godwin and Sowell will go through the taxes line by line and figure out a solution to put the taxes more in line.

Once they come up with a solution, they will present it to Rep. Mike Jones.

“We don’t want to have to worry about paying back a million dollars,” Godwin said.

Commissioner Harold Elmore said if they chose to do nothing, they might be liable.

Christensen said it was for equal protection, and that having to rebate the money would be a bookkeeping nightmare.

Commissioner Kenneth Northey wanted to make sure that the people understand they aren’t trying to raise taxes.

“We don’t want to cost either one of us,” he said.