In Alabama, the big catch for the state’s economic development prospectors is a manufacturing plant and its hundreds, maybe thousands, of high-paying jobs. But individual cities go to great lengths to get big-box retailers to set up shop in their city limits, deploying consultants and dangling incentives. They’re following the money. Because of the state’s tax laws, the largest single source of municipal tax revenues is sales tax.

Big-box retailers come in several types and brand names. The biggest of them all, though, is Walmart. The largest private employer in the world, Walmart grew from its roots in Arkansas to be a major force in virtually every part of the United States. In Alabama alone, 38,000 people are employed by Walmart.

Tens of millions of customers across America walk through the doors of the company’s stores every day. In Alabama, cities that have a Walmart get taxes on sales to those customers, which helps pay for services such as police and fire protection. Walmart’s website states the company collected $684.6 million in sales taxes and fees in Alabama for the fiscal year ending in 2017 and paid another $92.1 million in its own additional taxes and fees.

Dependence on sales taxes is unusual compared to most other states and harkens back to Alabama’s early days as a state that was almost entirely rural and dependent on the production of cotton and timber. Property taxes are lower than in other states, in some cases much lower, especially on agricultural and forest lands. Read more.

A Tale of Two Jefferson County Cities: Sales Tax Comes and Sometimes Goes

By Robert Carter
Gardendale Mayor Stan Hogeland is one of the city officials who work to attract retailers of all shapes and sizes – and their sales taxes.

He said he spends time trying to bring in retailers “every single day.” According to figures provided by City Clerk Melissa Honeycutt, Gardendale derives 70 percent of its tax receipts from sales taxes.

It’s a different story in Fairfield, about 20 miles away. Fairfield was once a thriving city and home to a massive U.S. Steel factory complex and numerous shopping centers. After the factory closed, the stores followed. When the Walmart there closed, it took about a third of what was left of the city’s tax revenues, according to the mayor. Read more.

BW Expands Economic Development Coverage

Robert Carter covers economic development in Birmingham and Alabama, a new assignment in 2018. He is a veteran journalist, both with newspapers and in radio. A Kentucky native, Carter began working at his hometown Glasgow Daily Times straight out of high school. He also worked with Christian Family Radio in Bowling Green and with Western Kentucky University’s public radio service. In Alabama, Carter has worked at The Birmingham News and The North Jefferson News in Gardendale.

Gardendale Mayor Stan Hogeland is one of the city officials who work to attract retailers of all shapes and sizes – and their sales taxes.
He said he spends time trying to bring in retailers “every single day.” According to figures provided by City Clerk Melissa Honeycutt, Gardendale derives 70 percent of its tax receipts from sales taxes.

It’s a different story in Fairfield, about 20 miles away. Fairfield was once a thriving city and home to a massive U.S. Steel factory complex and numerous shopping centers. After the factory closed, the stores followed. When the Walmart there closed, it took about a third of what was left of the city’s tax revenues, according to the mayor. Read more.