Economy
Commissioners Grant Tax Break to Keep Distribution Center in JeffCo
In an effort to keep a longtime business in the county, the Jefferson County Commission agreed to reimburse Red Mountain Distributing for 60% of the 1-cent sales tax the company pays to the county.
Red Mountain, which does business as Ashley Furniture, has outgrown its warehouse in Bessemer. The city of Bessemer this week agreed to abate half the sales taxes the company pays to that municipality.
“We’ll abate for 60% of the 1-cent,” said Joe Knight, chairman of the commission’s finance committee. “That 1-cent sales tax, you have indigent care coming out of there and the health department. The (remaining) third that (goes to) the general fund, of that 1 cent, we’ll abate 60% of that.”
The tax abatement is for 10 years.
Red Mountain Distributing has a distribution center in Bessemer and currently has four stores in the northern half of Alabama. Inventory at those stores comes from the center in Bessemer, which the company has outgrown.
Woody Marks, owner of the company, said during the commission’s committee meeting this week that the company is looking for a location to build a new distribution center.
“They’re gonna build,” Knght said. “They have to have more space. I think Bessemer’s incentives are to keep them in Bessemer. Our incentives are to keep them in Jefferson County, Bessemer.”
“Hopefully, they’ll find a place that they can continue,” Knight said.
He explained the tax benefits for the metro area. “If you go to Ashley Furniture in Hoover, the point of origin of the sale is the warehouse, which is in Bessemer. That’s where your taxes are abated or collected, even if it’s (the purchase is from the Ashley store) in Huntsville.
“It’s a point of sale at that warehouse,” he continued. “We want to keep that warehouse in Jefferson County. We think we’ll see an uptick in what they do. They’re putting a million dollars in the store in Fultondale and $700,000-something in another store. And they’re gonna add more stores in Alabama. We think the revenue will be neutral, even though we are allowing them to abate part of that 1-cent sales tax.”
