Long before the Christmas lights are strung and the glittery décor starts popping up in window displays, retailers are hard at work preparing for the holiday shopping season. Store owners describe the months of November and December as “make-or break” for their bottom line, and the long Thanksgiving weekend, including Black Friday, is one of the – if not the – biggest shopping weekends of the year. Alabama’s local retailers hope customers choose to shop small for their holiday purchases.
“When people choose to spend their dollars locally, those dollars go right back into the community,” said Margaret Hamm, owner of Monograms Plus of Cullman. Monograms Plus is a specialty gift and embroidery shop in downtown Cullman’s Warehouse District. The store carries a vast selection of national brands such as Pandora, Brighton, Yeti, Vera Bradley and Mud Pie, all under one roof. Hamm employs between 10 and 12 people, depending on the season.
“When you’re buying your Christmas gift, in person, from your friend or neighbor, you are giving two gifts. You are giving the gift to the recipient, but you are also giving the gift of allowing us to maintain our business, pay our employees’ salaries and pay taxes in the community. So, it’s really much more powerful than people think,” Hamm adds.
Brick and mortar retailers say they are optimistic now that Amazon, the largest online-only retailer, is collecting and remitting sales taxes in Alabama for the first time ever as of Nov. 1. Combine that with a strong holiday forecast, and the season is shaping up to be a good one for retailers throughout the state.
Through August of this year, Alabama has averaged 3 percent growth in taxable sales each month over the same month last year. If sales continue along that trajectory, Alabama could reach $11.2 billion in total taxed sales for November and December, the Alabama Retail Association predicts. Tack on the projected Amazon sales and the total taxed sales number goes up to $11.4 billion.
With Amazon collecting taxes for the first time ever in Alabama over those two months, the state estimates Alabamians will buy as much as $200 million in taxable merchandise from Amazon during the holiday shopping season.
Alabama’s 2016 holiday sales results, however, don’t rest on the tax collections performance to this point in the year or even the added Amazon sales. The 52 other online retailers participating in the state’s voluntary sales tax remittance program should add a substantial amount to Alabama’s total sales for the 2016 holiday shopping season.
In 2015, taxed holiday sales in our state totaled $10.9 billion, a jump of 5.15 percent over the 2014 holiday period, according to numbers provided by the Alabama Revenue Department. The Alabama Retail Association had predicted a 4.4 percent growth and close to $11 billion in holiday sales based on the sales performance during the rest of 2015. As it did in 2014, 2015 holiday sales growth in Alabama exceeded the national holiday sales growth. U.S. holiday sales grew 3 percent in 2015, and are expected to grow 3.6 percent this year, according to the National Retail Federation.
“We are quite optimistic that we will have our best Christmas ever!,” said Hamm. “We are thrilled the playing field has been leveled, and that Amazon is no longer being subsidized by our government, by being exempt from sales tax. Alabama certainly needs the tax revenue, and it is nice to see small business score a win!”