$250 million gap could mean new taxes or reduced deductions.
Small Business Owners Wary About State’s Shortfall
With Alabama’s General Fund facing a projected shortfall of $265 million or more next year, small businesses owners are wondering how proposals to close the gap would affect them.
Among the most damaging ideas would be adding a tax on services like haircuts and auto repairs. NFIB continues to oppose new taxes on services and labor in Alabama.
Other suggestions that could hurt small business include raising hotel fees or cigarette taxes. Also floated: cutting spending, reducing tax deductions, raising property taxes, changing the corporate income tax, pushing Congress to allow states to collect sales tax on online purchases, increasing fees and expanding gambling. Some of the changes would require voter approval.
Gov. Robert Bentley told the Alabama Media Group that getting rid of some deductions might let the state lower other taxes.
“I would like to look at some things like the grocery tax and whether or not we should be charging that,” he said.
Bills to eliminate the state sales tax on groceries, which could allow customers to buy more, are regularly proposed in the Legislature but have failed to pass.
The Legislature’s regular session begins in March, and the fiscal year in October.
What tax would hurt your business the most? Tell us in the comments section below.
