There is a place where natural resources and cultural heritage come together to tell the story of the Southern Appalachians. That place is Little River Canyon National Preserve which is filled with forested uplands, waterfalls, canyon rims and bluffs, pools, boulders and sandstone cliffs. Little River is unique because it flows for most of its length atop Lookout Mountain in northeast Alabama, the sixth state in our Sales Tax Tuesday 2018 series.
While you can’t call the Little River falls ‘spectacular’ in comparison to many of the worlds' other wondrous water falls like Angel Falls (in Venezuela) or Yosemite Falls (in the Sierra Nevada of California) or Niagara Falls (straddling the international border between Ontario, Canada and New York), you can (from the picture above) tell why this 45-foot-high waterfall is definitely a ‘must see’ on our Sales Tax RV journey, especially when the rock formations are covered in a fresh snowfall. Because this area is just south of Interstate 59 on Highway 35 between Fort Payne and Gaylesville, as you begin your trek into the Preserve, you can actually take in this view before reaching the Visitor Center and entrance gates. You know what that means, “there is no charge and no sales tax to see this site.” Beauty without taxation, that makes it pretty spectacular in my book.
Speaking of taxation, thanks to Avalara, the 'tax people', Insightful Accountant is publishing Sales Tax Tuesday 2018" every Tuesday in a new (2018) 50 part series, covering sales tax issues associated with each and every state tax jurisdiction in the United States. So, come take a ride with me in my big RV as we journey from state-to-state looking for what's great, and paying sales taxes all along the way.
As I said, our sixth state in this new series is Alabama. Alabama is the 30th-most extensive at 52,419 square miles, and the 24th-most populous state with just under 4.9-million residents, each paying up to 11% total (state and local) sales tax (based on statutory authority). And Alabama is one of seven states that levy a tax on food at the same rate as other goods, meaning that it fully taxes groceries and meals served without any offsetting relief for low-income families.
I actually came into Alabama on Interstate 65 from Tennessee and then turned east toward Huntsville, the third largest city in Alabama, so I could take the back roads in my journey to Little River Falls. I must admit that Huntsville is a beautiful place combining natural beauty with a modern (not so high) skyline.
Just south of town is the Redstone Arsenal and home of NASA’s George C. Marshall Space Flight Center. During World War II the military base here had stored strategic ordinance, but shortly after the war it became the home to many former German scientists who were developing guided missiles that eventually became the Redstone Rocket. In 1954 Wernher von Braun proposed the use of a Redstone Rocket to launch artificial satellites into space.
In early 1959 a new rocket was designed and called the Saturn, shortly thereafter President Eisenhower established the non-military National Aeronautics and Space Administration (NASA) and just a few months later Project Mercury was designated as America’s first program to put living creatures into outer space.
Essentially all of America’s efforts at putting the first man into space were centered within the research and development facilities of the Marshall Space Flight Center. By the time Alan Shepard was launched in Mercury-Redstone 3, the first manned flight of the Mercury project, the Marshall Space Flight Center was already working on the Saturn rockets to launch the Apollo missions to the Moon.
My own father grew up with Gordon Cooper, who as a child visited his grandmother next door to my dad, so naturally our family went 'space nuts' when we heard Cooper had been selected as one of the original Mercury 7 Astronauts. In many ways this place, and the other NASA facilities across our country, hold a very special meaning for my family.
By the way, Huntsville is also home to one of Alabama’s major auto production plants, this one owned and operated by Toyota Motor Corporation of Japan. If you drive a Toyota Tacoma, Highlander or Sequoia, chances are it is made right here in Huntsville.
Winding south from Little River Falls I plan to see some more of what Alabama has to offer before reaching Interstate 20. From the picture below you are probably thinking that “Murph took a wrong turn somewhere and now he is stuck in his RV.” No, I am actually taking a little break to explore part of Red Mountain Park in East Central Alabama.
While relatively small, at only 1500 acres, this is more of an adventure park offering a wide variety of activities including 15 miles of trails like the one here, 3 tree houses, an adventure tower, and several rope bridges and zip lines. But I’m sticking to the ground this trip, no zip lines for me.
Back in the RV, we have reached Interstate 20 at Oxford, so I turn west toward Birmingham, Alabama’s largest city (by population). But before we get there we reach Lincoln. You may not know the town of Lincoln, more likely you know it for it’s county seat status in the county of Talladega, home to Honda Manufacturing of Alabama.
Fooled ya, I’m sure you thought I was going to say, home to NASCAR’s biggest and baddest track, the Talladega SuperSpeedway. If you can ever afford admission to Talladega for the big race you will be paying sales tax on everything from your ticket, to the soda you drink, to the hot dog you consume. Even those memorable photographs from a day at the races.
We are not going to stay long in Birmingham, I’m getting hungry. But I wanted you to know that in the 1920s Birmingham was the 19th-largest city in the United States and had more than 30% of the state's population. Heavy industry and mining were the basis of its economy and they contributed more than 1/3rd of all tax revenue to the state.
But before leaving there is one historical treasure we should take time to visit within the Alabama Power Building. While I don’t remember a time without at least black-n-white television since Oklahoma City had the first Television station west of the Mississippi, I do remember going to both my grandmother’s house and great aunt’s apartment and listening to the radio because they had no TV. They both had big tube radios that seemed to glow in the dark.
The Alabama Historical Radio Society Museum is composed of restored radio’s of days gone by, when people would tune in to their favorite radio entertainers and listen to the news, weather and most importantly the ‘farm news.’ Take a few minutes to visit the past.
Leaving Birmingham, I’m actually headed down Interstate-59 toward Tuscaloosa. There I hope to find, I will likely smell my way, the Dreamland Bar-B-Que.
This is not a big place, but I’m not here for the ambiance, I’m here for the best hickory-smoked pork spare ribs in all of Alabama. And right at this moment I could eat a full slab. The ribs are ‘to die for’, but now I must pay the price.
Once upon a time, BBQ was one of the cheapest things you could eat in almost any state, but barbecue has become such a thing of pride it today commands a hefty price tag, still the same, it’s yummy. Unfortunately, the damage to my wallet doesn’t stop with the price of the ribs, you see there is 4% sales tax for Alabama, and 6% local tax, plus an additional 1% ‘restaurant tax’ so that means I will pay 11% total. Can you say, “ouch”?
Stuffed, I prepare to depart Tuscaloosa, but first I thought you should know that the ruins of what was once the former capitol of Alabama can be found here. The building was destroyed in 1923 even though the state had moved the capital in 1846.
Turning to the southeast on Highway 6, a road I once broke down on, but that’s another story. Anyway, I’m now headed toward Montgomery, the capital of Alabama since 1846.
Montgomery not only influenced state politics, sometimes for the negative, but it also played a prominent role in our nation. On February 4, 1861 representatives of the states that would become the confederacy met in Montgomery and subsequently named it the first capital of the Confederate States of America. It was sometime later that the Confederate States relocated their capital to Richmond, Virginia.
Montgomery is indeed a place of history. Civil Rights leaders in Selma had been protesting practices that created barriers to blacks registering to vote. Movement leaders, including Dr. Martin Luther King, Jr. decided to march on Montgomery to petition then Governor George Wallace to open voter registration to blacks.
State and county police forces harshly turned-back the marchers and the federal government ordered National Guard troops to protect the marchers. It was out of marches like those held in Montgomery that the Voting Rights Act of 1965 was passed to protect the rights of minority voters.
Today, Montgomery is undergoing a revitalization of the central business district and riverfront.
Of course, Montgomery being the State Capitol also means it is home to the Alabama Department of Revenue whose mission it is to efficiently and effectively administer the revenue laws of the state of Alabama in an equitable, courteous, and professional manner. Among those revenues laws are the state statutes governing Sales and Use taxes.
As much as I would like to drive on down to Mobile and the Gulf Coast where literally hundreds of thousands of visitors pay sales tax to enjoy all that Alabama has to offer in the way of 'fun in the sun' and Gulf seafood, I have to head on to another state close by that should be getting ready for big sales tax changes in April.
Still the same I will share a couple of tips with you; someone told me that if you 'make it to Mobile' be sure to enjoy the best Oysters on the Half Shell at Wintzell's Oyster House, or go for the 'mud bugs' (that's crawfish) at Mudbugs Cajun Seafood. I'm going to really miss not making it down there this trip.
But before I go, let me say that Alabama sales and excise taxes make up at least 50% of all state and local revenues for the state meaning that those taxes are critical revenues for Alabama. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income, and the Alabama Department of Revenue takes they mission very seriously.
It’s easy to be lured into a false sense of compliance when it comes to sales tax, that’s why you need a sales tax expert like Avalara helping you integrate sales and use tax collections and reporting into your overall business framework.
So, let’s take a look at some Alabama sales tax facts. By the way, for some essential sales tax definitions be sure to check out the opening article to this series.
- Alabama's state sales tax rate is currently 4% but the total tax rate can be as high as 11% depending on counties and municipalities.
- Alabama ranks in the top five for states with highest combined sales and local tax rates.
- Alabama is one of seven states to levy sales tax on food at the same rate as any other goods.
- Alabama Department of Revenue provides what they call "One Spot" for the collection of all Sales and Use taxes
- Sales tax in Alabama is destination-based
- Alabama is NOT a member of Streamlined Sales Tax
- Alabama has two 3-day sales tax holidays annually. One for Back-to-School Sales Tax and one for Severe Weather Preparedness.
Whether you are selling portable generators for $999.99 during the Severe Weather Preparedness sales tax holiday or prescription drugs for dogs and cats, you had better be clear on what is and isn't taxable in Alabama. After all, more things are taxable then aren't. And it's still illegal to sell peanuts after sundown in Lee County on Wednesdays.
With weird tax laws and regulations like that, trying to remain compliant makes you prone to error and consumes valuable hours of your time in collection, accounting and reporting for what is pass-through paperwork rather than revenue-generating activities.
Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avatax gives you the assurance of compliance without sacrificing productivity so that your sales tax is way less taxing than ever before. So take in the scenery, history, barbecue and excitement that's Alabama and let Avalara worry about the tax compliance.