MONTGOMERY-In the first six months of 2020, taxes remitted by sellers located in and outside Alabama grew by almost 6% compared with the same time last year.
In the midst of the current global health crisis, Alabama’s state sales tax collections plus collections remitted through the simplified sellers use tax (SSUT) program grew 5.94% over the first six months of 2019*, according to Alabama Revenue Department data. While collections were down in March and April, they rose significantly in May and June.
“Alabama’s retailers and restaurants are leading our state’s recovery,” said Alabama Retail President Rick Brown of the latest numbers available on taxed purchases. “They continue to put people back to work, pivot to make their businesses safe for their customers and employees and innovate to serve customers however those customers prefer.”
State sales tax collections for the month of June were up 11.32% over last year, while the collections remitted through the simplified sellers use tax program increased 94.83%, according to the Alabama Department of Revenue’s July abstract, which was posted last week. May collections also grew – sales tax by 8% and SSUT by 94.37% over the previous May (See June abstract).
The June sales tax collections reflect the first double digit growth over the same month in the previous year since April 2019 (10.99%). That increase does not necessarily mean that June sales increased that much. For the months of February, March and April, the state allowed certain small retailers and restaurants to wait until as late as June 1 to remit sales taxes due without a late penalty. The July abstract reflects taxes remitted in the month of June, not necessarily taxes collected in June. Businesses have until the 2oth of each month to remit sales taxes collected in the previous month.
Taxes remitted through the simplified sellers use tax program comes primarily from remote, online-only merchants. In the first six months of 2019, the simplified sellers use tax collections accounted for about 8% of the remissions made by businesses on purchases in Alabama. That percentage almost doubled this April to 15.72% while Alabamians stayed home rather than go to stores or restaurants to purchase their daily needs. In the latest numbers, the simplified sellers use tax accounted for almost 13 percent of the total collections.
Rick Brown
“We urge Alabamians to shop local, whether you shop in store or online,” said Brown. “When you shop local, your money remains in your community, it turns over numerous times and it keeps local businesses open and contributing to their communities.”
The Alabama Revenue Department’s monthly abstract reflects sales tax collections on general merchandise, restaurant and other food service, automobiles, machinery and vending. Collections made through the state’s simplified sellers use tax is a separate line item on the abstract. The Alabama Retail Association combines the two collection sources to get a better indicator of overall taxed spending in our state.
The numbers reported in the monthly abstract include only payments received during a particular month, according to the Alabama Revenue Department.
*As contained in February, March, April, May, June and July 2020 abstracts compared to abstracts for those months in 2019.
Media Release/Nancy Dennis, Alabama Retail Association
