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Local Alabama Tax Swap Considered


 Mobile, Alabama considers reducing sales tax, increasing property tax.

The sales tax rate in Mobile, Alabama, is too high, according to an Ad Hoc Committee for City Revenue and Growth Analysis. The 10% rate is among the highest in the nation, which is out of step for a municipality of its size (+/- 200,000). Worse, essentials such as groceries are not exempt.

Property tax, on the other hand, is relatively low in Mobile. As a whole, according to the urban Institute, “Alabama relies less on property taxes than any other state.”

The committee notes that the city’s overall economic outlook is improving thanks to cruise ship activity, Airbus production, new and improved development (and big box stores), and efficiencies in city departments.

It nonetheless “recommends that the city’s revenue sources be re-balanced so that Mobile relies less heavily on the unstable, less growth-oriented, regressive sales tax … and more heavily on sources that are more stable, less regressive, and at least marginally less detrimental to job growth and economic vitality.”

Recommendations:

  • Eliminate half a penny of sales tax and replace it with a fee for garbage collection.
  • Eliminate another half-penny of sales tax and replace it with a ten-mill property tax (upon voter approval, to be renewed every four years).

Read the full analysis report here.

Although the sales tax rate in Mobile has done nothing but increase in recent years, the movement to reduce the rate is not new. There was talk of it in the fall of 2014, when a temporary rate increase was extended. And there is talk of it now.

Find accurate local sales tax rates with this free rate map.


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.