Morgan County to outsource sales tax collection

Mar. 19—The Morgan County Commission will begin outsourcing its sales tax collection next month, with officials hoping the move will allow it to downsize an in-house operation that has struggled with staffing shortages.

Julie Reeves, Morgan County Commission chief administrative officer, said Morgan County collects from about 5,000 businesses within the county but does not collect from Decatur, Hartselle or Somerville.

Ray Long, Morgan County Commission chairman, said currently sales tax collection from Morgan County businesses is done in-house.

"We collect sales tax for four different municipalities, we collect for ourself, of course we collect for the school system," he said. "What this company will do, they'll come in and they'll take over all the collection."

The Morgan County Commission in a meeting last month approved a three-year contract with Avenu Insights & Analytics for sales tax administration services beginning April 1. The cost to the county will be $2.92 per transaction processed or 1.95% of revenue collected, whichever is less.

Reeves said the county estimates the annual cost will be about $350,000 for outsourcing. When fully staffed with seven or eight employees, the sales tax office costs the county about $540,000 per year. The office will now staff four employees and the estimated annual cost will be about $300,000.

District 2 Commissioner Randy Vest said the change eventually will save the county money.

"It'll save us money in the long run because we'll have less staff occupying the office and we don't have to maintain the cost of the software ... as that company already maintains that and keeps that," he said.

Long said Avenu will be taking over almost the entire operation.

"They're just really taking over our sales tax department," he said. "We're still going to have the department; we'll have four employees there when all this is said and done."

Long said it is important to keep the sales tax office open.

"You're going to have people who will want to walk in," he said. "Businesses don't want to mail their tax in, they want to come see somebody and give it to them. So, we've got to have somebody there at the counter to take those."

Long said two employees will stay in the office while the other two will be out in the county making sure businesses have their licenses. He said it is hard to hire employees right now.

"We have two openings there now and we always have openings," he said. "It just seems like when you get somebody trained, they'll bid to another job. And that's a real important office."

Reeves said staffing shortages have been a problem in the department.

"When we are fully staffed, the current process works well but staffing shortages create an extra burden on the current staff and there is less time for customer oversight," she said. "We thought it was a good time to transition to an outside provider and feel comfortable with Avenu since they are already servicing 47 of the 67 Alabama counties."

At the Feb. 28 commission meeting, the commission approved hiring temporary workers until Avenu takes over.

One of the vacancies in the sales tax office is the director of Sales Tax and License Enforcement. At the meeting the commission approved amending the job description for the director.

"Right now, you have to have a bachelor's degree, that won't be needed down there. Avenu's got all the bachelor's degrees that we'll need," Long said. "We'll still need an associate's degree in something. It's a very complicated department, collecting all the sales tax, but a lot of the responsibilities are going away when Avenu gets up and running."

Also at the meeting, the commission lowered the pay grade of the director position due to fewer educational requirements and reduced responsibilities. Starting hourly pay for the director was $30.31 but has now been reduced to $27.50, depending on experience.

Reeves said hiring Avenu will not change the percentage given to school systems and the schools will receive their usual percentage with no reduction for the cost of outsourcing collections.

—erica.smith@decaturdaily.com or 256-340-2460.