Sales tax holiday a boost
Rep. Ronald Grantland, Guest columnist
Many families are hit hard around the time school starts back. Just about everything is expensive these days, and school supplies are no exception. Kids come home with long lists that are filled with not only pencils, paper, and notebooks, but also other classroom necessities that schools can't provide such as Kleenex, soap and paper towels. Families across our state spend hundreds of dollars on school supplies, and unfortunately, many families are unable to provide the supplies that their children need.
The Legislature recognized that parents need help stretching that back-to-school dollar, so the House passed a bill creating a sales tax holiday exempting certain items from the state sales tax during the first full weekend of August.
The bill exempts school supplies, certain computer equipment, and clothing items from the state's four percent sales tax.
Counties and cities are also granted the option to remove sales taxes.
However, all the school supplies in the world mean nothing if our classrooms are underfunded. Democrats recognized that the sales tax holiday bill, on its own, was not fiscally sound. Common sense tells us that we can't make cuts in one area without those cuts being felt in another area.
Sales taxes are earmarked for education and are a significant part of our education budget. Every penny collected from sales taxes goes into Alabama's classrooms. So a tax holiday by itself would take significant money out of schools budgets. This is something that no parent wants for their children, and something that the Legislature could not allow to happen.
In response, Rep.Terry Spicer (D-Elba), sponsored a companion bill that would make up the difference for any lost sales tax revenues and linked it directly to the tax holiday bill.
For years, out of state corporations were not required to collect state sales taxes on goods sold in Alabama. This bill closes that loophole and requires out of state businesses to collect the taxes that our in-state companies were already collecting. The bill levels the playing field for our state and local businesses. But more importantly, the bill pays for the education budget hit that the sales tax holiday will create.
For years, the Legislature has looked for a solution to the tax holiday budget hit.
This year, through cooperation, we were able to find the solution to make sure that real tax relief will be felt by working families.
These two bills are a prime example of the great things that can be accomplished through bipartisanship.
It doesn't matter what side of the aisle a truly good idea starts from; it will generate support if it's done right.
As we head into the second of half of the 2006 session, several critical issues will be up for debate, such as the General Fund Budget, the issue of tax fairness, and bible literacy. These issues will affect people across our state and will not be accomplished without support from both sides of the aisle.
There is no doubt we need a fairer tax system. The threshold Alabama starts collecting income taxes on working people is the lowest in the nation. The state pulls money out of working folks' paychecks after the first $4600, causing those who make the least to pay the most. This leaves many across our state economically strapped and fighting to put food on the table.
By targeting tax cuts to families without ripping it out of classroom budgets, like we did with the tax holiday- tax nexus bills, the Legislature showed that many things can be accomplished through compromise. A similar spirit should be used if we are to address our state's other critical needs.