Tuesday, May 5, 2009

Lawmakers “On Fire” Over Grocery Tax Bill

Today’s House consent calendar began with HB 116, the grocery tax bill sponsored by Representative John Knight.

For those of you who have been following our blog this session, you will recall that this is the very same bill that virtually shut down the House with a filibuster for a month. Its presence on today’s operating calendar was the fourth time it has appeared for a vote.

Representative Knight said today that this bill is an “economic incentive package for working families of this state.”

Seeking recognition from Speaker Hammett, Representative Duwayne Bridges ( R ) from Chambers County took the podium and lit a candle in remembrance of small businesses in this state who he said have been taxed to death.

HB 116 would remove the state’s portion of the sales tax on groceries but at the same time would seek to make up those forgone dollars by removing the federal income tax deduction for certain individuals meeting an adjusted gross income threshold. Those in opposition to the bill argue that it would place more of a tax burden on small businesses in Alabama including LLC’s, LLP’s, and S-Corps.

Representative Bridges went on to ask the House membership why they would want to further tax the very people who are providing jobs in Alabama? He reported that the International Council of Shopping Centers forecasts that 200,000 businesses in the U.S. will close by the end of this year alone. He said that small businesses are being taxed too much already and the brunt of taxes are being placed on their backs.

At the conclusion of Rep. Bridges’ remarks, Rep. Knight asked for the candle and re-lit it in remembrance of the children in Alabama who have no groceries and those who cannot perform properly in school because they are hungry.

HB 116 failed by one vote to gain enough support to move forward for a final vote in the House.

After the vote failed, Representative Mike Hubbard, Chair of the Republican Party in Alabama, commented that they had offered a compromise but the Democrats working on the grocery tax bill would not sit down with them. He stated that Republicans are not in opposition of removing the sales tax from groceries but are opposed to removing the federal income tax deduction.

The Republicans’ alternative to HB 116 would provide a tax rebate for low income families, a plan similar to the ones already in place in Idaho, Hawaii, and Oklahoma, but the Democrats refused to meet with them. Representative Hubbard stated that their bill had failed to even come up for consideration in committee.

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