Business owners: Sales tax hike ‘sign of times’

Published 9:33 am Monday, February 28, 2011

Consumers may see a hike in their grocery costs, as well as costs for other goods sold throughout Atmore after the city council approved an increase in sales taxes in the city last week.

But, some business owners say the effect on local retail sales will be minimal.

Joe Brown, owner of Country Charms, said the increase in sales taxes imposed by city officials isn’t a surprise.

Sign up for our daily email newsletter

Get the latest news sent to your inbox

“This is just a sign of the times,” Brown said. “Sales are down because of the economy so that means sales tax revenue is down. It’s just something that had to happen.”

Rob Faircloth, owner of David’s Catfish House, said Atmore’s rates are just coming in line with other areas in the region.

“Compared to other counties around us, we’re just now catching up to where they are,” Faircloth said. “We’ve been able to keep our taxes low for a while. I’m glad we’ve been able to hold ours (taxes) down as long as we have.”

Brown agreed and said Atmore’s sales tax rate is just coming in line with other cities in the surrounding area.

Sales tax rates in Atmore, which will become effective April 1, will give the city an additional 1 percent in tax revenues on retail purchases. The city tax rate will increase to 4 percent while the state rate of 4 percent and a county rate of 1 percent will remain unchanged.

City sales tax rates in surrounding areas show Brewton at 3 percent, East Brewton at 4 percent, 3 percent in Bay Minette and 2.5 percent in Monroeville.

In August 2007, the City of East Brewton raised the sales tax rate to 4 percent to avoid loss of employees or services in the city.

East Brewton Mayor Terry Clark said the tax rate increase was received well and the move saved the city on many levels.

“This is just something we had to do and it was the right move for us to make,” Clark said. “Because of the increased revenue we have been able to maintain our staff and their benefits and we’ve been able to provide continued services like fire and police protection to our citizens.”

Clark said about 90 percent of revenue for the city comes from sales tax – a tax he said is the most fair for anyone.

“When you impose a sales tax it’s the fairest tax there is,” Clark said. “No matter who you are or how much you spend you are paying your fair share of taxes. Everyone pays the same sales tax regardless of class or spending habits.”

Although some shoppers may give big-ticket purchases more consideration, the long-term benefits from a tax increase are worth the effort, Clark said.

Faircloth said any time sales taxes rise a direct effect on business can be expected.

“Any increase in taxes will have an effect on business, at least for a while,” Faircloth said. “The fact is, everything is going up – taxes, cost of goods, gasoline, everything except wages. That’s what bothers me the most. With all these things going up, what’s going to be the thing that will break us?”

Brown said he didn’t believe the increase sales tax would have a big impact on his business.

“Most folks will see the biggest difference at the grocery store where they spend more money,” Brown said. “In our business, I don’t think we’ll see much difference in sales.”

Atmore Mayor Howard Shell said previously that the increase in sales tax is needed and warranted for the city to function well — or at least steadily.

“It’s not going to be above and beyond and give us funds to do everything with,” Shell said. “The city will not see (tax revenue) until June or July. You might be looking at $350,000 to $400,000 this year.”