Saturday, 28 December 2013

The Bama Tax Story

Months ago, I hung out with my dad for a day, and we went across the state line....to a farm supply warehouse sales operation.  My dad bought a huge bag of dogfood, and around a hundred bucks of other farm-related items.  I didn't really see the necessity of shopping over into Tennessee....figuring there's plenty of farm supply stores in Bama.

Well....my dad pulls out a card at the cash register and he's noted as Tennessee-buyer, and thus entitled to a tax discount from the state of Tennessee.

So here lies an interesting tale.  Tennessee, along with Georgia and Florida....wrote up a law to exempt farmers on farm supply sales.  It amounts to roughly 1.5 percent of the normal bill.  A farmer might spend six thousand bucks a year on supply items....maybe even fifteen thousand if it's a big operation.  That 1.5 percent savings?  It kinda matters.

It gets a guy to pausing and pondering. The state of Bama is surrounded by Tennessee, Georgia and Florida.  If you live within a hundred miles of the state line.....you might find just cause to drive over and do business out of state.  The amount of money leaving the state and Bama business operations?  Unknown....but it would appear that we aren't talking about marginal sales loss.

In the last couple of weeks, some Bama legislative folks have met up in Montgomery (Republicans, mind you), and discussed this loss of business.  Someone in the Bama farm supply business probably has added up what they did twenty years ago, and noted that there's some serious purchases and profit leaving the state.

The Bama legislative folks are now talking of a bill to exempt Bama farmers from 1.5 percent of the tax normally put on them.

Now, a guy would ponder on city taxes and what this all means.  Right now....if you went shopping within the city limits of Madison (just outside of Huntsville)....you'd pay nine percent on sales tax.  It's a hefty amount, and you'd pay eight percent if you shopped inside of Huntsville itself.  Even from my hometown of Florence....it's 8.5 percent on sales tax.

Will it persuade Bama farmers to toss out the strategy of shopping across the state line?  It's hard to say.  Farmers, once they get into a frame of mind that they are saving money and getting a better deal...won't easily give up their habits.

And the thing is....if you decrease this tax to help so-and-so....how will you make it up?  A new boat tax?  A higher gas tax?  A new tractor registration fee?  A hunting license fee increase?  You can't fix one problem....without creating another.  It's a sad fact of life.  

2 comments:

Don said...

Some wise man once said that only two things are certain.....death and taxes.

Don said...

Some wise man once said that only two things are certain.....death and taxes.