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A bill to increase Alabama’s online sales tax, which was rejected during this year’s regular legislative session, is expected to be reintroduced next year.

HB 17, sponsored by Rep. Chris England, D-Tuscaloosa, would have increased the Simplified Sellers Use Tax, an online sales tax, from 8% to 9.25%. The additional amount would have been allocated to the state treasury for the General Fund and Education Trust Fund, local governments and local education agencies.

A second bill concerned the SSUT and provided for a recalculation of the tax rate every few years using a formula. It was linked to the adoption of another bill providing for a VAT exemption.

The bills did not pass in committee. A message was left Tuesday with House Budget Committee Chairman Danny Garrett (R-Trussville).

Local sales tax rates can be higher than online sales tax rates. England said the lower rates did not need to be maintained after the Supreme Court ruled that online purchases could be taxed.

“Now it is mandatory and we agree with SSUT. The way it is distributed has a significant impact on the funds that go to our schools,” he said.

England’s bill would have given school districts more discretionary funding for local needs.

“A lot of things that school systems are paying for now, including transportation and gas, etc., or local costs are increasing while local funds are not increasing,” he said. “So my hope is with the SSUT is to help local school boards absorb some of the costs that they are bearing locally.”

Funds from the Education Trust Fund are earmarked for specific purposes, which is not the case with local funds.

“These local funds are critical for each system to meet the needs as they see fit,” said Vic Wilson, executive director of the Council for Leaders in Alabama Schools.

Ryan Hollingsworth, executive director of the Alabama Superintendents Association, said in an email Monday that the SSUT is a problem that needs to be addressed.

“We were disappointed to see a bill fail that would have shared a portion of online sales tax revenue with our schools,” he wrote. “While some county commissions share SSUT revenue with our school systems, most do not. In most of our counties, local sales tax revenue is declining as people increasingly shop online instead of in person. SSUT revenue continues to grow very rapidly while local sales tax revenue is declining.”

Sally Smith, executive director of the Alabama Association of School Boards, wrote in a statement Tuesday that she supports local school boards receiving “the same share of SSUT revenue as they receive from sales tax at the local level.”

“Since the passage of the SSUT in 2015, local school boards have been consistently excluded from this growing revenue stream, while local sales tax revenue for brick-and-mortar schools continues to decline,” she wrote. “As the gap between online sales tax and traditional sales tax continues to widen, there is less and less local revenue available to public schools.”

She wrote that they would continue to urge the government to give public education its “fair share.”

“These missing dollars represent a value decision,” she wrote.

In England, there are plans to introduce a similar bill next year that would similarly affect the distribution of funding across school systems on a per-pupil basis.

“Many people see this big number out there and say the Education Trust Fund spent eight, nine or ten billion dollars on education. They get the impression that that money is being implemented at the local level in the same way. But that’s not the case because different school systems have different levels of funding,” he said.

Wilson said he was “satisfied” with the final version of the bill, but he did not “like” it.

“We have to give and take to get things that we want or that we feel very safe and comfortable with. Likewise, someone who is against something has to get something that they also feel comfortable with,” he said.

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