Selma business owners question constitutionality of additional liquor tax

Published 9:15pm Wednesday, April 2, 2014

A group of package stores is challenging the legality of Dallas County Drug Court’s funding methods.

A lawsuit, filed on February 14, asks for a declaratory judgment on the constitutionality of a 5 percent tax on liquor in Dallas County.

Listed among the defendants are Fourth District Attorney Michael Jackson, who receives 25 percent of the tax for operations of the district attorney’s office, and Dallas County District Judge Bob Armstrong, who receives 75 percent of the tax for the Dallas County Drug Court. Plaintiffs include several package stores and Side Porch Sandwiches.

“I applaud the drug court for their efforts, but I’m not sure an extra sales tax is the answer when the burden is on the shoulders of the tax payers,” said Dianne Smitherman, owner of Side Porch Sandwiches and the plaintiffs’ attorney. “Small businessmen are getting hurt by [the tax]. Quite frankly, I think the court would be better served generating revenue elsewhere than on the backs of small businessmen.”

The tax, which has generated more than $50,000 since September, is only leveraged on liquor sold by class two package stores in Dallas County.

It doesn’t apply to liquor sold by retail stores, such as Side Porch Sandwiches. The tax also doesn’t apply to the Alcoholic Beverage Control Board’s retail store on Highland Avenue.

The lawsuit lists three specific counts challenging the constitutionality of the tax, including the U.S. Constitution and two sections of the Alabama Constitution.

Smitherman said the main issue in her lawsuit is treating similar businesses fairly, as the package stores charge a 15 percent sales tax and the Alcoholic Beverage Control Board’s store charges a 6 percent tax.

“It would be fine if it was a situation where all entities were required to pay equally,” Smitherman said. “[Package stores] are losing customers, particularly in the hunting season when the lodges come in to buy liquor. The lodges will say no thanks and go to the state store. Even small purchasers are motivated to drive to the ABC store.”

State Rep. Darrio Melton, D-Selma, who introduced the tax into the Alabama House of Representatives, declined to comment on the lawsuit, but said the tax was designed to help reduce drug and alcohol dependency in Dallas County.

“By increasing a tax on alcohol sales, we can gain additional, elective revenue to help fund the drug court for those who choose to break the law,” Melton said. “It keeps non-violent offenders out of jail, gives them an opportunity to get the treatment they need and keeps their families together.”

In a previous interview with The Times-Journal, Armstrong also declined to comment on the lawsuit, but said the tax was modeled on similar measures in other Alabama counties.



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