Giving tax break on emergency items may be costly but worth it

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February 26, 2012

Giving tax break on emergency items may be costly but worth it

Anonymous Associated Press Sun Feb 26, 2012, 02:00 AM CST

— From The Birmingham News:

We know all too well that deadly storms in Alabama don’t take a holiday.

While Alabama’s worst months for tornadoes are April followed by March, the other top months, in order, are November, May, February and December, according to the National Weather Service. And in January, at least 11 tornadoes swept through the state, including one that killed two people in Jefferson County.

On Feb. 14, the timing — and time — were right for Gov. Robert Bentley to announce Severe Weather Preparedness Week. The goal is to spur the public to be prepared before the next severe weather hits. ...

Those ways of being better prepared for storms are part of 20 common-sense recommendations from the tornado council that need to be put in place as quickly as possible. Doing all that is a daunting task, especially given the disastrous shape of state budgets.

Despite that, Bentley is pushing a sales-tax holiday on storm-related supplies. The once-a-year holiday would offer a break on the state’s 4 percent sales tax for weather radios, generators, flashlights, first-aid kits and other supplies needed for weather disasters.

Bentley said the holiday would be similar to the state's tax-free holiday in August on back-to-school items such as books, computers, clothes and supplies. A bill for the storm-related holiday has not yet been introduced in the Legislature.

One difference between the two holidays could be the effect they have on state tax collections. State officials have maintained the back-to-school sales-tax holiday has not hurt state coffers. In four of the first five years, sales tax collections for the month of August actually increased over the previous year as shoppers made up the difference in lost sales tax by buying nonexempt items.

That hasn't been the experience in Louisiana with its state sales-tax break on hurricane preparedness items. Louisiana's two-day holiday exempts purchases of up to $1,500, and the Louisiana Legislative Fiscal Office estimated a loss of revenue of about $2 million per year. Louisiana also has a 4 percent state sales tax, and about 250,000 fewer people than Alabama, according to census figures. ...

A sales-tax holiday isn’t great tax policy, but in this case, with lives at stake, it is an investment worth making.

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