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Opinion | Online sales tax collection: What does this really mean for Alabama’s municipalities?

Frank Brocato

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The steady increase in online sales over the past decade has triggered an alarming shift in consumer purchasing habits from shopping at local brick and mortar establishments (which support community-owned businesses) to buying via remote sellers.

The significant decrease in local sales and use tax collections make it more difficult for Alabama’s municipalities to provide basic services such as police and fire protection, road resurfacing, solid waste collection and disposal, educational funding and other essential services.

In fact, according to data from Adobe Digital Insights, which tracks 80 percent of online spending at America’s 100 largest retail websites, American shoppers spent a record $6.22 billion in 24 hours during Black Friday in 2018, which marks a 23.6 percent increase in dollars spent online compared with Black Friday 2017. The Friday after Thanksgiving this year was also the first day in history to see more than $2 billion in sales stemming from smartphones according to Adobe.

What is SSUT and how does it need to be adjusted?

In 2016, the State passed the Simplified Sellers Use Tax (SSUT) to allow sellers to voluntarily pay tax on sales that would otherwise be outside the municipal taxing authority under current law.

In 2018, the Alabama Legislature passed HB470 requiring marketplace facilitators – on-line malls – to collect and remit sales taxes from all vendors marketing their products through these platforms and limiting the sales tax collection discount for online retailers to one percent. HB 470 also enhanced the split of local governments’ SSUT revenues to 60 percent to cities and 40 percent to counties.

In an effort to address this increasingly challenging issue, the Alabama League of Municipalities formed an ongoing Digital Economy Task Force in 2017 to examine shifts in consumer shopping and develop solutions to prevent what could very well decimate our municipal budgets over the next few years. I am honored to serve on this task force and have participated in many SSUT discussions over the past year. Recognizing that there continues to be a discrepancy in sales tax rates between local brick and mortar and online sales, the League and we, as municipal officials representing our citizens, are now advocating for parity in the sales tax rates between local vendors and on-line retailers during the 2019 Legislative Session. We believe a nominal tax increase for online sales of 1% would lower the disadvantage to local stores, which are currently collecting and remitting more than online retailers, while adding millions of sales tax dollars back into our local economies. This will provide necessary tax revenue for police and fire protection

as well as the many quality of life services our citizens not only expect but demand.

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As the number of vendors remitting taxes via the SSUT portal increases, even with the 60/40 split between counties and municipalities, Hoover will continue to be at a disadvantage compared to its prominence in retail sales for the State of Alabama overall. Therefore, attempting to equalize the rates is definitely a positive step to making the playing field between online retailers and brick and mortar stores more equitable; however, the formula (by population) for tax distribution across municipalities should also be reconsidered by the Legislature. Making this change will increase the effectiveness of the SSUT in capturing the loss of revenues from online shopping for the City of Hoover as well as other municipal retail hubs throughout the state.

What does this mean for Alabama’s municipalities?

Speaking for my municipality, the increase in online retail sales has substantially impacted the City of Hoover’s sales tax collections. For the State of Alabama, in calendar year 2017, the Alabama Department of Revenue received over $66.7 million through its Simplified Sellers Use Tax (SSUT) program to be distributed to counties and municipalities across the state. During that time, Hoover represented 2.82 percent of the population formula for distribution and received only $471,400 of the total $16.7 million disbursement related to municipalities. However, Hoover represents a larger percent of retail sales compared with other municipalities in the state. Based on conservative 2012 census retail sales estimates, Hoover represents 5.14 percent of all retail sales across the state (compared with 2.82 percent of population). Thus, due to the SSUT formula being based on population, Hoover is collecting 45 percent less than if it was based on the estimated retail composition percentage.

In addition, if we applied the conservative 5.14 percent of all retail sales that Hoover represents to the SSUT calendar year 2017 tax basis of $834 million, it would represent $42.9 million of online sales applicable to Hoover, or $1.3 million in taxes (based on the 3 percent tax rate in effect during that time period). Under this scenario, Hoover is collecting only 37 percent of what would be due locally, when compared to the actual 2017 SSUT distribution. This differential for Hoover SSUT tax receipts will only increase due to the new requirement passed by the Alabama Legislature in Act 2018-539 that amends the Simplified Sellers Use Tax law.

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As of January 1, 2019, marketplace facilitators having sales made into Alabama through the marketplace of $250,000 or more are required to register, collect and remit all marketplace sales, including those of marketplace sellers, or report such sales to the Alabama Department of Revenue and provide customer notifications. This is a positive change for municipalities that will result in more revenue collections; however, the disparity for Hoover will be even greater as SSUT collections grow. Consequently, as dollars spent online increase, under the current distribution methods, Hoover will continue to experience less revenue collections through the SSUT portal than it would likewise receive from our brick and mortar stores.

As the Legislature considers modifications to the SSUT program and the ramifications of our society moving to online sales, we are hopeful our state lawmakers will also carefully consider additional formulas and data points that recognize current retail hubs around the state. I am confident that local and state leaders can identify a measure and distribution method that will treat all Alabama’s municipalities fairly.

 

Mayor Brocato began his career with the Hoover Fire Department in 1973. During that time, he became the first paramedic for Hoover. After 42 years of service, Mayor Brocato retired in 2015 as the Chief of Operations and Fire Marshal. He was sworn in as the 10th mayor of Hoover on November 7, 2016. He currently serves on the Alabama League of Municipalities’ Executive Committee and Digital Economy Task Force.

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Opinion | “Just Mercy” and Justice don’t exist in Alabama

Stephen Cooper

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The chance of there being “just mercy” for Nathaniel Woods—facing lethal injection on March 5 for the killing of three Birmingham police officers—is as good as the chance Alabama will ever reform its dismal, no-justice-to-be-found-anywhere legal system; it ain’t gonna happen.

A Hollywood movie and best-selling book about a legendary lawyer getting an innocent man off of death row can’t change a culture of condemnation on its own. It can’t, by itself, defeat deep-seated hatred and crass corruption that feeds off, subjugates, and disenfranchises the poor in Alabama.

And so I hate to tell my progressive, abolitionist friends: But it is unreasonable and naive to think the undeniably decent call for “just mercy” can push the needle from out of the veins of flesh-and-blood human beings—even old, dying ones—condemned to death in Alabama.

The righteous cry for “just mercy” can’t cool the hot, facile, and feral appeal of vengeance in a state soaked in the blood of slavery and segregation, where hatred for common humanity thrived, and, where it remains, having long ago seeped into its criminal code, its policies of mass incarceration, its entrenched and inescapable poverty for so many, its abysmal prison conditions, and its terrible, twisted addiction to capital punishment.

“Just mercy” doesn’t exist in Alabama, because truth be told, justice doesn’t exist in the state either.

Elsewhere I’ve written how Alabama has been torturing poor people for a long time, how it’s been ducking and dodging death penalty accountability, and, how its sick and shrouded plan to exterminate a substantial portion of its death row population with nitrogen gas is an abomination. But this time let me offer a new, concrete, more personal anecdote to illustrate how unfair and unjust Alabama’s so-called “justice” system is.

Over five years ago, as a “capital habeas” or “post-conviction” attorney, I was involved in litigating a capital case in Alabama; the end result of our Herculean effort was that a man named Christopher Revis had his death sentenced vacated and a new trial ordered—by Marion County Circuit Court Judge John H. Bentley—because of juror misconduct and ineffective assistance of counsel. 

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Over five years have passed since that magical, momentous, Hollywood movie-like day when Bentley ruled. But, guess what? Christopher Revis still has not had his new trial. 

That’s right: Even though Revis was ordered to have a new trial on capital murder charges over five years ago, he hasn’t had it. Nor has his case otherwise been resolved. Instead, the only thing that has happened to Revis during all this time is he has remained in Holman prison—locked down in a place that is otherwise known as “hell on earth”—where he had already been incarcerated for nearly a decade before I met him.

Last year, after more than four years had passed since Revis was ordered by Judge Bentley to have his new trial, I re-activated my Alabama bar card and traveled to Alabama for a few days to see if I could suss out—as a freelance writer who still cares about my former client, his family, and the rule of law—what the heck is happening. I failed.

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But I am not alone. Because does anyone in the legal community, press, or the public know why Christopher Revis has not had his new—constitutionally mandated—trial yet? Has any competent, conscientious journalist anywhere ever looked into Christopher Revis’s case and this question before?

Nope and nope.

Have I, as Revis’s former lawyer, and after having been contacted and asked to do so at various times by Revis’s desperate family—over the years since I left law practice—done everything possible to alert members of the legal community and the press (both local and national) of the unconscionable passage of time in Revis’s case? Yup. But you can google for yourself to find out just how little that has accomplished.

And so, although I don’t relish being in the role of spoiler and bearer of bad news: In my opinion, based on my own personal experience, before “just mercy” can be anything but a wishful and fleeting slogan on highway billboards in Alabama, the state must first be able to competently and fairly provide justice to its citizens. Citizens like Christopher Revis. So far it hasn’t.

Stephen Cooper is a former D.C. public defender who worked as an assistant federal public defender in Alabama between 2012 and 2015. He has contributed to numerous magazines and newspapers in the United States and overseas. He writes full-time and lives in Woodland Hills, California. Follow him on Twitter at @SteveCooperEsq

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Opinion | A lesson in civility

Larry Lee

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As already mentioned here, Sunday afternoon Feb. 9, I participated in a League of Women Voters forum in Dothan to debate the pros and cons of Amendment One.  I opposed the measure.  Senator Greg Albritton from Atmore supported it.

I had done my homework and so had he.  We both spoke with passion and conviction.  There was no doubt we were on opposite sides.

However, we were friends when we got there and we were friends when we left.

I respect Greg and the fact that he was duly elected by the majority of voters in his senate district.  He certainly has a right to his viewpoint and his opinions.  I have no doubt he feels the same about me.

Our exchanges were lively and even interspersed with moments of laughter and good will.

In other words, we were civil.

And as I drove back home to Montgomery, I couldn’t help but think of how what had just played out was in such stark contrast to what we see far too often in politics these days, especially in Washington.  Both civility and respect have become four letter words in the nation’s capital where if someone disagrees with you they are usually ridiculed, berated and the object of insults.

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We are destroying what is most dear to this republic. The presumption that as a whole we are better than the sum of all our parts.  That all citizens should be treated with dignity, not chastised because they don’t think like we do.

I understand better than most that 2020 is an election year and that in such times, passion often replaces common sense.  But even so, even that does not condone so much of the junk we see on TV and Facebook right now.

It is shameful.

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Of course, I will vote NO on amendment one.  And Greg will vote YES.

But to me, the larger lesson of this forum was not so much about the pros and cons of this legislation as it was that civil discourse and disagreement can–and should–be conducted with civility.

When it is not, we are all diminished.

 

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Opinion | President Trump has the best week of his Administration

Bradley Byrne

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Last week was President Trump’s best since moving into the White House.  After giving a well-received State of the Union address, the President was acquitted by the United States Senate, announced the killing of a major terrorist, and received a great jobs report.  On the other hand, Democrats suffered several significant embarrassments.

It began Monday at the first-in-the-nation Iowa caucuses.  Despite months of work to manufacture enthusiasm, Democrats experienced extremely low turnout across the state.  Things went from bad to worse as a host of errors prevented the counting and reporting of votes!  Of course, it isn’t hard to see why the people of Iowa were not eager to support Democrat priorities.  Socialist policies like the Green New Deal, Medicare for All, and confiscation of firearms are radical and dangerous, and most Americans reject them.

 In contrast, the very next day, President Trump presented a clear vision for keeping America great in a rousing State of the Union speech.  I left my seat many times to applaud the President and his many guests, each of whom had inspiring stories.  Two of hi s guests were Stephanie Davis and her daughter Janiyah from Pennsylvania.  Janiyah had been on a waitlist of over half a million students to receive a scholarship to go to a better school.  President Trump shocked the crowd by awarding her a scholarship right then and there!

The story of Janiyah was especially important to me because the President called on Congress to pass my bill, the Education Freedom Scholarship and Opportunity Act, so that one million American children could have the same opportunity for a scholarship!  I developed this bill with Education Secretary Betsy DeVos and Senator Ted Cruz.  President Trump is right that no parent should be forced to send their child to a failing government school, and I am proud to lead this important Trump administration priority.

The State of the Union ended on an embarrassing note for Democrats as Speaker Pelosi ripped up her copy of the President’s speech.  This petty, undignified tantrum plainly displayed the level of “Trump Derangement Syndrome” that she and her cohorts suffer from.  They simply cannot stand to see President Trump succeed.  They are in crisis after their impeachment plan failed.  In fact, it backfired and lost support as their rigged process was exposed.  Realizing her mistake, Speaker Pelosi appealed to Facebook and Twitter to have videos of her ripping the speech taken down!

I was proud to be a leader in that fight against the sham impeachment.  Thursday, a day after the President was exonerated, I was among a handful of House members invited to the White House to celebrate.  It was an amazing honor and surprise to receive President Trump’s personal thanks for fighting by his side throughout this process.

Later Thursday, the President announced that an American airstrike had killed Qassim al-Rimi, a terrorist and the leader of al Qaeda in the Arabian Peninsula (AQAP) in Yemen.  AQAP claimed credit for the December 2019 shooting at the Pensacola Naval Air Station that took the lives of three servicemembers, including Ensign Joshua Watson from Coffee, Alabama.  President Trump has made clear that our enemies will pay for taking American lives, and terrorists across the globe now know that he isn’t messing around.

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Finally, an excellent January jobs report was released.  Employers added 225,000 jobs as the economy continues to strengthen.  Importantly, wages for working Americans are rising.

Put it all together and its obvious why the President’s approval rating is at the highest levels of his administration.  Clearly the Democrats’ misguided prioritization of an unpopular impeachment scheme has them in dire straits.  I vow to keep fighting with the President against radical socialism and to support his America First agenda.

 

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Opinion | Positive results from the Alabama Department of Labor

Fitzgerald Washington

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With the closing of the past decade, and at the beginning of a new one, economic conditions in Alabama couldn’t be much better.  We at the Alabama Department of Labor have been busy wrapping up statistics and facts for 2019, and we’re happy to share those positive results with everyone.

If you’ve noticed the news reports over the last year, you’ll know that Alabama is currently experiencing a period of record growth and success.  In 2019, we announced brand new economic records nearly every single month. We closed out 2019 with the lowest unemployment rate on record – 2.7 percent! In fact, until last year, Alabama had NEVER experienced an unemployment rate below 3.0 percent. We hit that mark three times last year.  Nationally, our unemployment rate decreased more than any other state (over the year).

With that record low unemployment rate, it’s no surprise that we also have record high employment – meaning more people are working today in the state of Alabama than EVER BEFORE.  In December, more than 2.2 million Alabamians were counted as having a job, representing a yearly increase of nearly 84,000 people.   Every single month in 2019 saw a brand-new record high level of employment.  So did our labor force. That means that more people were in the workforce than ever before.  That’s significant because it shows that people believe there are jobs to be had.  And, #wehavejobs.  We have a lot of jobs.

Last year, our economy supported more jobs than it ever has at any point in time in our history.  Employers reported more than 2.1 million jobs in November and December.  Over-the-year job growth reached record highs, and we met or surpassed the national job growth rate for 11 out of the last 12 months. Alabama employers continue to post jobs on the state’s online jobs database, www.joblink.alabama.gov.  More than 210,000 jobs were posted on the site last year, and nearly 800,000 people visited it.

For four years in a row now, we’ve soundly beaten economists’ job growth projections.  In 2019, economists projected Alabama would gain 22,000 jobs.  We gained 75,000. (Based on year to date growth, January 2019 – December 2019.) For 2020, they’ve projected a gain of 29,000 jobs.  We’re hopeful we can beat those projections for yet another year. By the way, the jobs we’re gaining aren’t just any jobs.  The majority of the growth was in the professional and business services sector, which includes professions like engineers, architects, and computer systems designers.  Wages in this sector reached a record high last year, notching a more than $20 weekly wage increase (over the year).  At least seven sectors and subsectors saw record high weekly wages last year, and overall wages, also at a record high, experienced a nearly $9 increase.

Despite all these positive indicators, we know we still have plenty of work to do. Even with record low unemployment rates, there are still some 60,000 Alabamians who are unemployed.  Our mission is to connect every Alabamian who wants a job, with an employer who needs a worker.  We won’t slack on that mission now.  We know our job will never get easier.  In fact, as the economy improves, our job in some ways becomes harder.  We still have companies locating in Alabama that need workers, and we have an obligation to provide a qualified and trained workforce.  With that in mind, we’re working on the following goals:

  • First, we are committed to helping Governor Kay Ivey realize her goal of adding 500,000 highly-skilled employees to the workforce by 2025.

In order to meet the needs of our employers, we must continue to work hard every day to train and equip our workforce to respond to today’s challenges.  Through the Success Plus initiative, Alabama’s workforce community is committed to add 500,000 credentialed workers by 2025.  This can be accomplished in many ways; either through accreditation programs via Alabama’s Community College System, training from the state’s workforce development agency, AIDT, On-the-Job Training and Apprenticeship programs, and more.  Our 50 Career Centers, located throughout the state, provide access to all of these programs and more.  We are committed to doing our part to ensure the continued success of the state.

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  • We want to increase awareness of the services available to both employers and jobseekers throughout the state.

Through targeted outreach efforts over the past several years, more and more Alabamians are aware of the free, valuable services available to them through our Career Centers.  Not only for the unemployed who are looking for work, we also provide services to those who are looking for a new career.  We can help you get the right training, or the right education, to make those dreams a reality.  For employers, we can help you narrow your search to find the perfect candidates, and even help with wage costs.  There’s truly something for everyone at your local Career Center.   Please take a moment and check us out, we’d love to help you! Find out more at www.labor.alabama.gov.

 

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