GUEST COLUMN | The Duck Test: 'Door Dash Loophole'

*The following is a guest editorial written by Tuscaloosa Mayor Walt Maddox*

TUSCALOOSA, AL — "If it walks like a duck, swims like a duck, and quacks like a duck—then it probably is a duck."

Click here to subscribe to our free daily newsletter and breaking news alerts.

The Alabama Department of Revenue (ADOR) wants local leaders to believe something that defies common sense: that when a product is sold, delivered, and consumed within your city or county, whether by Walmart Marketplace, Kroger, DoorDash, Shipt, or others, it doesn’t count as a local purchase.

Instead, they label these transactions as online sales from out-of-state corporations. This practice, often referred to as the “Door Dash Loophole,” clearly fails the Duck Test.

ALSO READ: Mayor Walt Maddox: 'Door Dash Loophole' And Dark Walmarts (Part 1)

Since 2018, ADOR has drastically expanded the number of sellers eligible for the Simplified Sellers Use Tax (SSUT) through marketplace facilitator laws. Only ADOR can explain the reasoning behind this expansion, but the consequences are clear:

1. Local small businesses are being undercut.
2. The long-standing principle of physical nexus is being eroded.
3. Tourism-related tax revenue is increasingly at risk.

A Trip to Alabama’s Gulf Coast

When the Maddox family heads to the beach—say, a condo in Orange Beach or Gulf Shores—our first stop after dropping off our bags is the grocery store. That shopping trip contributes essential sales tax revenue for police, fire, rescue, and other services needed to support more than 6.5 million annual visitors.

But, if I use DoorDash to deliver the same groceries from the same local Publix, the cities of Orange Beach and Gulf Shores lose out on that revenue.

The Result:

Orange Beach, Baldwin County Schools, and even Alabama’s Education Trust Fund are shortchanged.

Tourism and Retail Are Being Undermined

The “Door Dash Loophole” isn’t just a technicality or a transaction by another name — It’s devastating for tourism-focused communities. Whether it’s Albertville, which built the world-class Sand Mountain Park and Amphitheater, or Foley’s OWA Entertainment District, these cities depend on capturing retail tax revenue generated within their own communities.

When ADOR classifies commercial retail activity inside your city as remote or out-of-state, even when the product is sold and delivered locally, it sure quacks like a duck. And everyone in Alabama should be concerned.

Walt Maddox is the 36th mayor of the City of Tuscaloosa and has served in the office since 2005. These opinions are his own and do not necessarily reflect the views of Tuscaloosa Patch or our parent company.