Retail sales continue to lead Alabama’s economic recovery; Gains over 2020 shutdowns ‘off the chart’

Taxed sales for March and April 2021 jumped almost 41% in Alabama from what was collected for the state in the same 2020 months, according to the latest numbers from the Alabama Department of Revenue.

Every month since May 2020 has seen healthy growth over the same month in the previous year, based on state revenue abstracts. Nine of those months saw double-digit growth.

But the growth is off the charts a year later compared with the two months when businesses suffered the most in 2020 due to pandemic operating restrictions.

Collections on in-person sales in Alabama added to those for online sales at stores without a presence here were up 42.3% in March 2021 vs. March 2020. Regular collections grew 38.16% and Alabama’s simplified sellers use tax was up almost 72%.

Total taxed sales in April 2021 grew almost 39% over April 2020, the month many businesses in Alabama had no in-store sales at all. According to the May 2021 abstract released last week, regular collections in April increased almost 41% and the simplified sellers use tax saw a nearly 29% jump.

As they do normally, March collections exceeded April’s, but still Alabama experienced record total tax collections in each of those months – $334,044,781.37 in March and $308,602,092.13 in April. The only other month to break the $300 million mark in collections was December 2020 ($306,075,638.67).

Consumer spending, mostly through retail sales, led Alabama’s economic recovery in 2020 and in the first quarter of 2021. That trend likely will continue to gain steam this summer. The National Retail Federation expects retail sales to grow between 10.5% and 13.5% to more than $4.44 trillion nationally in 2021, according to NRF’s revised annual forecast. NRF Chief Economist Jack Kleinhenz anticipates the fastest growth the United States has experienced since 1984.

Inflationary expenses, lingering supply-chain delays and a continued lack of workers to fill open jobs are the forces Alabama retailers say could slow that momentum.

Even though Alabama sales declined in March and April 2020, our state ended last year with an overall taxed sales growth rate of 7.13%.

Retailers and other businesses collected more than $3 billion in sales taxes from Alabamians in 2020, almost $203 million more than they did in 2019.

In November and December 2020 alone, Alabamians spent 11.6% more than they did during the same period in 2019. December’s sales numbers beat every other December ever in Alabama.

A version of this article will appear in the July 2021 issue of Alabama Retailer magazine.