County clarifies hospital tax to include auto sales

Published 5:50 pm Wednesday, August 26, 2015

The Chilton County Commission met in a special meeting on Wednesday to clarify what is included in the 1-cent sales tax approved by voters in June 2014 to fund the construction of a hospital in Clanton.

At issue was the taxation of vehicles sales in the county.

Though the original bill approved by voters included vehicles, the tax was not being collected and dealers had been told they were exempt by officials.

“It was our fault,” said Allen Payton of the Chilton County Health Care Authority, the organization that reports to the commission and is overseeing the project. “It was not a purposeful misleading.”

Collection of the sales tax began in August 2014, but officials noticed that revenue was below projections.

About $2.8 million has been collected so far, while projections were for the tax to bring in $3 million to $3.5 million per year.

An analysis determined that a half-cent sales tax on vehicles—including new and used cars, tractors, etc.—was not being collected as had originally been intended.

The issue was brought up at the commission’s regular meeting Monday, but it was decided to adjourn the meeting and reconvene on Wednesday to give officials time to reach out to local dealerships.

Members of the commission and Health Care Authority said they spoke to representatives of the dealerships, and while they weren’t happy about the mix-up or the extra tax, they didn’t want to stand in the way of the hospital opening.

If the mistake had not been corrected, revenue could have been about $800,000 per year short of projections, which could have affected the county’s bond issue, and thus the funding of the project.

In addition to a resolution re-affirming the original intent of the tax increase bill, the commission passed separate resolutions committing the county to not rescinding the tax until the bond is paid, to using the sales tax collected to pay debt related to the hospital and no other purpose, and protecting those who sold vehicles from being charged for back taxes.