FAIRHOPE, Ala. — Some local retail customers may have noticed recently that their purchases at Fairhope businesses have included the new municipal sale tax.

“It went into effect July 1,” City Clerk Lisa Hanks said this week. “So, we’ve now got a 2-cent sales tax in the city, 1-cent in the police jurisdiction, and a 1/2-cent for special businesses such as car dealers and manufacturers.”

The first sales tax in the city’s 100-year history was approved by the City Council in April to start in June, but the tax was vetoed by Mayor Tim Kant.

That veto was rejected by the council in May, after Council President Debbie Quinn changed her position and voted for the override. She had initially voted against the tax with Councilman Mike Ford, while Councilmen Dan Stankoksi, Rick Kingrea and Lonnie Mixon voted for it.

Those council members said it was needed to avoid a cash shortfall of about a million dollars by year end, and to reduce transfers from the utilities departments into the general fund, which they said had resulted in the failure of the city to maintain and upgrade the city’s electric, gas, water and sewer systems.

The sales tax was adopted despite a sizable opposition, claiming it flew in the face of the city’s history as a “single-tax” colony; that it was not needed at this time; and that it would relieve the city from facing hard choices about where to cut expenses.

At a town meeting at which close to 300 people turned out, a majority of speakers voiced their opposition.

Local businesses have until July 20 to remit their first taxes to the Alabama Department of Revenue, along with the 2-cent county and 4-cent state tax they are already sending, Hanks said.

“They have until the 20th of the month to pay their sales tax,” said Hanks, referring to the date each month that local businesses must pay what is now a total 8-cent sales tax.

She said the state revenue department would make the first direct deposit into the city’s bank account sometime next month.

Estimates of how much the new sales tax will raise annually have varied from $4 million and $7.5 million.

The ordinance requires that half the amounts raised be put in a reserve account with restrictions on its use, and the other half in the general fund.

Hanks said that new businesses not familiar with the process of remitting sales taxes to the state can download the necessary form from the state revenue department’s Web site, which they can either fax or mail in.

“The majority of payments will probably come in to the city’ after the 20th of each month,” she said.

The sales tax ordinances can be found on the city’s Web site at: http://www.cofairhope.com/gov_ordinances.php