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Online sales levies helped stabilize city budget

News Staff Writer

Although many “non-essential” businesses in Atmore were forced to shut their doors during the early stages of the COVID-19 pandemic, the city’s revenue stream continued to flow at a fairly even pace. In fact, municipal revenues exceeded budgeted amounts by nearly two-thirds of a million dollars.
An increase in gross receipts tax, or sales tax, was fueled in large part by legislation passed in 2018 that opened up a new source of income for municipalities, taxes on transactions conducted online by people across the state.
“We had an increase in taxes from online sales, from Amazon and people like that,” explained Mayor Jim Staff of the budget-balancing influx. “They are now required to pay eight percent on any sales they make in Alabama, and the money is distributed to the cities by population.”
Staff noted that the online tax rate was less than the levy added to in-store sales, but agreed that it was better than nothing, which is the amount online retailers paid until the Alabama Legislature approved the Simplified Sellers Use Tax more than two years ago.
“They ought to be paying more, but it’s better than what we were getting,” the mayor said.
With even the smallest stores now open and doing business, the SSUT revenue allowed the city to surpass its budgeted amount by roughly $666,667 during Fiscal Year 2020, which ended September 30, and to budget $6,700,000 for the current fiscal year.
Staff said the city dodged proverbial bullets during March, April and May, then again in September and October, when hurricanes Sally and Zeta made back-to-back assaults on the city just a few weeks apart.
“There was no detrimental effect on the city from the pandemic, and we sure got lucky with the hurricanes,” he said. “We didn’t have any major infrastructure damage from them, and none of our businesses were forced to shut down because of them.”
The other major sources of municipal money include business licenses, which bring in about $1.5 million annually, and ad valorem (property) taxes that provide $1.42 million a year.
Budgeted revenues for FY 2021 also include garbage fees ($540,000), lodging tax ($538,000), gasoline tax ($325,000) and rental tax ($300,000). In all, there are 32 different revenue sources that fund city operations.
City Clerk Becca Smith, who prepared the budget, said she tried to remain optimistic when devising the funding plan. But, she added, the continued spread of COVID-19 could render the plan irrelevant.
“Realistically, if the restrictions go back to what they were earlier this year, it could drastically affect our revenues,” she said.