Sales tax in Colbert will increase Aug. 1

TUSCUMBIA -- Sales taxes in Colbert County will increase by a half-cent on Aug. 1 after the commission's approval Tuesday night of a resolution geared to help the Shoals attract industry.

A legislative bill approved in the recently concluded session gives commissioners in Colbert and Lauderdale counties authority to increase the sales tax.

All of the money will be used for economic development purposes. Proponents of the increase say the money is critical in helping the area land a boxcar company that is eyeing the Shoals. The company would employ 1,500-1,800 workers.

Lauderdale commissioners will address a similar resolution at their meeting on Monday.

Colbert County Commissioners voted 5-1 in favor of the tax increase. The tax will only increase if the same measure is approved in Lauderdale.

Commissioner Emmitt Jimmar voted against the measure, claiming that sales taxes are regressive and negatively impact lower-income residents.

Jimmar said he was not against the concept of providing incentives to companies wanting to locate in the area, but wishes there was another way to provide money needed to compete for industrial projects.

The additional half-cent is expected to raise $5 million to $6 million annually.

For consumers, it means a $100 purchase will cost an additional 50 cents.

"We need that so we don't have to go back to the people every time we need money (for industrial recruiting)," said Commission Chairman Rex Burleson.

He said the tax can be reviewed in 10 years and rescinded if it is not being used, so long as there was no outstanding debt.

"This will be good for Colbert County and the Shoals," Burleson said.

Donnie Allen, owner of STACS, will have to send notices to every business in Colbert County to advise them of the tax increase and when it will be collected.

Allen's company collects sales taxes for municipalities in Colbert County.

Allen said he will also send notices to sellers based in other states and do business in Colbert County.

"We'll have roughly five weeks to get about 3,000 sets of (tax) forms (delivered to businesses)," Allen said. "It takes time to get that to the right people."

In other business, the commission: