“Shop Local”, “Support your local business”, “Love What’s Local” – Why does it matter?
Do you like police and fire protection, parks and recreation amenities, paved roads, the library, the museum, the senior center and the list goes on and on?
You may think that a penny doesn’t matter but they add up in a hurry!
Out of our 9% sales tax, the state receives 4-cents, the city 3.5-cents and the school system receives 1.5-cents.
The city and the school are both funded by the local sales tax. It is the city’s largest source of revenue to operate. The money it provides pays for your necessary city services, education plus numerous other things that improve your quality of life. The money used by the school system helps fund additional teachers and things above the state funding level. It is so important to run your city!
You think – well I purchased “this” online from Amazon (or any other retailer without a presence in the city) and I paid sales tax. Therefore you think you are paying the same thing you would pay if you bought physically in Guntersville. The tax charged by these online retailers is called SSUT (Simplified Sellers Use Tax). SSUT only charges 8% use (sales) tax while the majority of sales tax rates in the state are 9%. So to begin with, the collections are behind the average. The SSUT is collected by the state, and the state gets their 4% so they don’t lose any money on the transaction. Of the remaining 4%, the cities get 60% (which is 2.4%) divided by all the cities in Alabama (approximately 460) based on population and the counties get 40% (which is 1.6%) divided by all 67 counties based on population. You share your use (sales) tax with everyone in the state. For example on a $100 purchase you would pay $8 in tax with the state getting $4, the city getting $.00384, and the county getting $.01376. While it’s better than nothing at all, the cities and counties are not made whole.
If you purchased the exact same thing in a store in Guntersville, the State would get 4%, the City would get 3.5% and the schools would get 1.5%. Using the same example on a $100 purchase you would pay $9 in tax with the state getting $4, the city getting $3.50 and the schools getting $1.50. As you can see, the city is in a deficit from the dollars you spent online versus the dollars spent in Guntersville.
Also, the online stores are not required to purchase a business license in Guntersville. While this isn’t a huge amount of revenue, it does help provide city services. The online stores aren’t paying property tax either because they don’t have a physical location in our city. This takes away from the city and the schools.
Not only is sales tax important to the city in providing services, but the money that you put back into the local economy helps employ people and when the local businesses are successful they give back to our community.
That is why it is so important to support our local businesses and buy local!