Eliminating tax on OTC drugs offers limited relief
Published 8:35 pm Saturday, September 16, 2006
Alabama Gov. Bob Riley has recently toured the state and proposing, among other measures, to eliminate state sales tax on over-the-counter medications to senior citizens.
Locally, people who deal with seniors daily say the measure would be limited benefit for the elderly.
“Ninety-eight percent of our people are on prescription drugs,” said Counsel on Aging Director Emily Haney. “That’s where they need the relief. But I guess anything would help those on fixed incomes.
Local pharmacist Phillip Presley, who works for Athens Pharmacy, said state sales tax at 4 cents on the dollar, would have little effect on seniors’ overall drug costs.
“Eliminating the tax might stimulate some purchasing, sort of like the back-to –school shopping weekend,” said Presley. “But I don’t know if it would make a big difference to those coming in to spend $10 to $15 on items. If they buy $40 worth, it might make a difference.
Athens Mayor Dan Williams said he didn’t know the governor was proposing eliminating sales tax on over-the-counter medications to seniors.
“A lot of these issues come up in election years and nothing ever comes of them, but I don’t have anything against seniors getting a break,” said Williams.
If Riley is reelected and makes good on his campaign promise, would the city and county follow suit on local sales tax? Williams said he didn’t think it would be “a tremendous loss of revenue,” but he said the city and county does not have as much leeway in abating taxes because the funds are already committed.
Of the 8 cents on the dollar sales tax paid in Limestone County, 4 cents goes to the state; 2 cents goes to Limestone County for education; 1 cent goes to the city’s General Fund, and 1 cent goes to the Athens City Board of Education.
“The Athens board also gets a portion of the 2-cent county tax, about 21-22 percent,” said Williams. “The city can abate its portion of the tax for industrial prospects, but we can’t, by law, abate school taxes.”