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Pinson receives unexpected 40K Excise Tax

The Pinson News of Pinson, Alabama

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The city of Pinson has received unexpected funds, approximately $40,000. from the Financial Institution Excise Tax that Mayor Sanders said is basically profit tax on financial institutions.

In the September 3 Council Meeting Sanders said that in 2007 the city received $28K. In 2008 the city was told they would not receive any funds due to the turmoil in the banking industry. Sanders said, "Therefore, I did not budget for it for the 09-10 year. Fortunately, we received this this year. Banks pay a nominal business license to municipalities."

The Excise Tax on Financial Institutions is levied to give effect to the provisions of Federal law limiting the right of the states to tax national banking associations. It is not a tax on income but is an excise tax measured by income. The proceeds of the tax, after the expense of administration, are distributed one-half to the municipalities, one-fourth to the counties and one-fourth to the general fund of the State.

Mayor Sanders said the funds were unexpected but will be added to the general fund to cover items that were not originally budgeted for such as the purchase of used furniture for city council offices.



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Original Publication Date: September 18, 2009



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