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Letson proposes reducing sales tax on vehicles

By M.J. Ellington
mjellington@decaturdaily.com · (334) 262-1104

MONTGOMERY — People in the market for a car in Lawrence County would pay less sales tax under a proposed legislative bill that Rep. Jody
Letson plans to introduce in mid-May.

The vehicle sales tax bill would lower Lawrence County’s tax on vehicles from 1.5 percent to 1 percent, something that Letson, D-Hillsboro, said the County Commission endorses.

“The purpose is to make Lawrence County and Moulton more competitive with automobile dealers in other areas,” Letson said.

John Carpenter, a Moulton Ford dealer, first asked Letson about lowering the tax during the 2006 regular legislative session, but not in time to complete the required legal advertising and pass the bill.

Lawrence County raised the vehicle tax rate to 1.5 percent during a revenue crunch, but Letson said finances are better now and the commission approves the reduction.

On a $30,000 vehicle, a buyer would save about $150.

Increased sales

The lawmaker believes increased car sales would soon make up the loss in revenue for the county.

He said Moulton city officials may reduce the city’s vehicle sales tax as well, a move that he believes would help the county’s only new-car dealer compete with dealers in nearby cities like Athens and Decatur.

Carpenter urged the council to decrease the city’s 1 percent vehicle sales tax April 2.

Mayor Ray Alexander said he would be willing to cut the city’s in half, if the county approved cutting its percentage as well.

Including the state’s tax, Lawrence County car buyers currently pay 4.5 percent in vehicle taxes.

In comparison, in Muscle Shoals, where the city tax is 0.375 percent and the county’s is 0.188 percent, car buyers pay only 2.5 percent total in vehicle taxes. Staff Writer Kristen Bishop contributed to this article.

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