By Jean Cole
Athens residents alarmed by the City Council’s decision to raise the sales tax to 9 percent may want to look at rates in surrounding cities and counties, particularly how much each city actually receives from the tax.
A study of the rates shows some overall sales tax rates are lower, some are the same and some are higher, and that some city’s rates will remain higher even after Athens’ tax hike takes effect Jan. 1.
The study also shows four surrounding cities currently receive a greater portion of their total sales tax than the 2 percent the city of Athens currently receives. Some of those cities will continue to receive a greater percentage even after Athens raises its rate.
Here are the current rates of surrounding cities:
• Decatur (in Morgan County) charges 9 percent, which includes 4 percent for the state, 1 percent for the county and 4 percent for the city;
• Huntsville (in Madison County) charges 8 percent, including 4 percent state, .50 percent county, and 3.5 percent city;
• Florence (in Lauderdale County) charges 8.5 percent, which includes 4 percent state, 1 percent county and 3.5 percent city.
• Madison (in Madison County) charges 8.5 percent, including 4 percent state, 1.5 percent county and 3 percent city;
When Athens goes to 9 percent, 4 percent of that will go to the state, 2 percent will go to the county and 3 percent will go to the city. Three surrounding cities — Decatur, Huntsville and Florence — will still retain higher percentages of their sales tax than Athens. Madison’s will be the same as Athens at 3 percent. The highest sales tax rates in the area will be in Limestone County portions of Decatur and Huntsville, at rates of 10 percent and 9.5 percent respectively.
In the wake of the tax hike, some Athens consumers have threatened to shop elsewhere. But whether consumers will, in the long haul, spend money to buy gasoline to travel elsewhere for a 1 to 1.5 percent difference in sales tax seems unlikely. Some have said they would shop elsewhere for big-ticket items. Automobiles, manufacturing machinery or tractors are not subject to Athens 9 percent sales tax rate anyway.
In the case of property taxes, Decatur, Huntsville and Madison all pay higher rates than Athens.