Well, today is sales tax day in Alabama.  Every month, on this same date, I have to file and pay our sales tax for all in-state sales for the previous month to the City of Decatur, Morgan County, and the State of Alabama.  Some months, this is pretty depressing.  When I don’t pay much, it means I didn’t sell much to local, walk-in customers.  I love those months when I write the big checks to these three agencies.  Big sales tax checks mean big local sales and big local sales mean the local dive community is active and growing.

People often don’t understand the role local merchants play in the revenue stream for the local governments.  We collect the sales taxes, we hold them in trust, and then we divide them up and distribute them to the various tax authorities.

Each month when I file my sales tax reports, I wonder what the future will be for the revenue stream in local governments.  As we all know, you pay no sales tax when you make a purchase from an Internet site outside of your state.  Sales tax revenue is the life-blood of most local governments.  As Internet sales increase, sales tax receipts for the local governments decrease.  Consumers have learned that they can save an immediate 7%, 8%, or even up to 11% by making purchases from outside of their state, thereby avoiding those sales taxes.  Of course, every state has a provision called a Use Tax that requires individuals to file a return and pay the local sales tax on all items purchased outside of their state.  Unfortunately, I have never heard of anyone that actually files one of these returns.  Many already feel that the state gets enough; they aren’t about to voluntarily give more.

Oh well.  I guess I would suggest that scuba equipment buyers should take advantage of the benefits of buying from an online operation.  Avoid that sales tax if you legally can.  However, we should expect that the states and local governments will decide to remedy this problem at some time in the future.  I don’t think they can continue to watch their revenue drop as Internet sales increase.  Don’t be surprised when they act.

Phil Ellis

Discount Scuba Gear with Full Factory Warranty on Every Item