Highland Lake sales tax

The Town of Highland Lake is a unique place. Lake residents and other observers might say its distinctiveness comes from its beauty, but that is not the only way the town is special. It is one of the few towns in Alabama that is completely zoned as residential other than the public parcels. It also has no sales taxes of any kind, for any amount. Never has.

The first two attributes are not going to change any time soon; however, the third might. On Sunday, officials at Highland Lake held a second public meeting to discuss three proposed tax ordinances that will affect those within the town’s limits and those who live within the town’s police jurisdiction, which extends 1.5 miles outside the town’s borders.

• A sales tax of 3 percent for sales within the town’s limits and 1.5 percent for those within the police jurisdiction.

• A motor fuel tax of one cent per gallon for sales within the town’s border and one-half cent within the police jurisdiction.

• A lodging tax of 4 percent for any “rooms, lodgings, or accommodations” provided to transients in town limits and 2 percent for those in the police jurisdiction.

The implementation of the taxes is straightforward in some respects, but complicated in others. If a purchase is made at the Highland Quick Stop, the only retail business within the town’s jurisdiction, the sales and/or fuel tax will be added on. If a home is rented to a vacationer through services like VRBO or Airbnb, the appropriate tax has to be collected. That much is clear.

Then it gets complicated. A purchase made anywhere else, but delivered to a home within the town’s jurisdiction, will require the appropriate sales tax.Propane, for example, is purchased elsewhere, but delivered. If the sales tax passes, the propane company will charge the tax.

The same is true for purchases of building supplies, appliances, or anything else delivered. In those cases, it will be incumbent on the purchaser to inform the seller the delivery will be made within Highland Lake’s jurisdiction in order for the town to collect the tax.Mayor Donna Hanby said area retailers will be notified of the new taxes if they pass, and the state revenue department will collect the tax and distribute it to the town.

Gail Bailey, the chair of the Highland Lake road committee, explained the need to enact these taxes became apparent last year when the county informed the town it would no longer maintain the town’s 15 miles of roads. While the town already receives its share of taxes from the state’s fuel tax, the county’s Moving Blount County Forward one cent sales tax, and will get more revenue from the 2019 Rebuild Alabama Act, those funds would fall short of the estimated needs as put forth in the town’s five year plan for road maintenance.

Those taxes already in place will give the town approximately $28,000 per year in the near term. That would cover the $25,000 in the FY2020 plan to chip seal 3.16 miles of roads, but would fall far short of the estimated $122,000 needed to “reclaim and refinish Lakeshore Drive from Brasher Creek Bridge to Sand Creek Bridge” in FY2021.

Officials had no estimate of the amount of money the new taxes would raise, but whatever the amount, they explained that 65 percent of the new taxes would go to road maintenance and the remaining 35 percent would be allocated to the police department budget.

A representative for the Sugarland Lake homeowners was present and asked for a “good faith commitment” from the police department for increased patrols because its residents will be affected by the new taxes as well. Chief Scott Kon did not go as far as to promise more patrols, but said the department would continue to patrol the nearby community.

The town council will meet at The Anchor for its regular meeting on Tuesday, March 10, at 7 p.m. The ordinances will be on the agenda.