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Valley Grande will forgo Alabama tax holiday

The City Council here decided that the city will not participate in the 2009 Alabama Sales Tax Holiday during its meeting on Monday.

Valley Grande Mayor Tom Lee cited a low amount of eligible products and the headache participation causes as reasons the city should refrain from participation.

“If we had a major retail chain here that had a significant number of items, it might be very much in their favor to do that in order to attract business in,” said Lee. “When you really look at the program, it’s great for large, retail vendors that have a significant amount of sales of these selected items, and we don’t happen to have them.”

The sales tax holiday was introduced in 2006, and has typically begun in early August. It is a three-day period that begins at 12:01 a.m. on the first day and ends 48 hours later, and excuses eligible items — mostly back-to-school necessities — from taxation.

These items have included varying items of clothing under $100, computers, printers, crayons, notebooks and several other products.

Valley Grande participated in the program in 2006, but passed the following two years. Valley Grande Market and Dollar General are two of a handful of businesses that have eligible products, but efforts to participate in the holiday have proved to not be worth the trouble.

“We might have 12 items out of 11,000 that require us to go into and re-price for these three days,” said Lee. “After those three days are up, we have to go back in there and put tax.”

The process does not end there. Lee said items sold during that period also have to be documented and tracked for the city to verify the reason taxes are not collected for the period and to prove the items were sold for that period.

He also said that several businesses in the area are at a disadvantage by not having electronic, point-of-sale software that allows them to quickly tag individual, eligible items. Complicating matters further is the lack of flexibility afforded to businesses by participating in the program. The county and individual municipalities have the option to not participate. However, if a municipality chooses to, businesses must participate as it becomes illegal to collect tax on eligible items.

“[Dollar General] told us last year that it was just an absolute pain to do that, to go in and release the tax then re-impose the tax,” said Lee. “For that reason, they encouraged us, unless we just had to do it, not to do it.”

The only action that will be required by Valley Grande to avoid participation is submitting a letter to the state indicating its intent to not participate.