Alabama education budget committee approves bidding, sales tax bills

The Alabama House Ways and Means Committee Wednesday approved legislation that would raise the floors on competitive bid projects and sales tax liabilities. 

HB 65, sponsored by Rep. Terri Collins, R-Decatur, raises the amount needed for a competitive bid on contracts by school boards. As filed, the bill raised that amount from $15,000 to $25,000. Collins offered a substitute in committee that raised that amount from $15,000 to $40,000 and would then tie it to the Consumer Price Index.

Collins said that she had wanted to match what cities and counties had for their minimums. Using the Consumer Price Index, she said, was “so we wouldn’t have to keep coming back.”

HB 77, sponsored by committee’s chair Danny Garrett, R-Trussville, raises the threshold for monthly sales tax liabilities from $5,000 to $20,000. It would mean that fewer businesses would need to pay monthly estimated sales tax payments. Garrett said it would affect 3,100 businesses.

Both bills were approved. 

Garrett ended the meeting by providing a presentation on taxes that compared different taxes in Alabama to those of other states. Garrett said with all of the different taxes accounted for, Alabama is a low-tax state.

He also pushed back against the 2023 State Business Tax Climate Index by the Tax Foundation, a nonprofit generally critical of tax increases and tax credits, that found Alabama to be ranked 41 in business-friendly states by saying that the study was a “very academic exercise” based on tax structure. 

Unlike Alabama, many of the top ten ranked states in the study lacked one or more “major” taxes, such corporate income taxes, individual income taxes or sales taxes, according to the study’s executive summary.

“If you look at their report, the best business climate in the country is Wyoming,” Garrett said. “The second business climate is South Dakota. The third business climate is Alaska. Florida slips in there, then Montana, New Hampshire, Nevada, Utah. You see my point? I mean, those are places where nobody lives with no business investment.”

Rep. Barbara Drummond, D-Mobile, questioned comparing Alabama to other southern states and wanted to learn more about the poverty rates of those states.

“Are we keeping our citizens poor?” she said. “I know that’s a pretty loaded question, but that’s terribly important.”