Could Montgomery Lower Its 10% Sales Tax?


By CBS 8 News

Montgomery Mayor Todd Strange was on CBS 8 News at 6:00 to talk about the possibility that the city might lower its portion of the current 10% sales tax.

Strange says a tax rate that high is anti-competitive. He says a lower rate would make the city's goods and services more attractive.

Currently, the city's 10% sales tax is broken down like this: 4% goes to the state, 2.5% to the county and 3.5% to the city.

Strange says over the next several months, the city may use legal and financial experts to consider its options on lowering the sales tax, and ways to make up that money somewhere else. He says for every cent the tax is lowered, it would bring in $26 million to $27 million less revenue.

One option some have mentioned is an occupational tax, which Strange says 25 cities in Alabama have. He says it's an idea that's not been ruled in or out.

In the meantime, he will present his budget to the City Council tomorrow. He says it will contain no new taxes or fees.

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