GUEST COLUMN: Tuscaloosa Mayor Walt Maddox | SSUT Myth Busting (Part I)

*The following is a guest column submitted by Tuscaloosa Mayor Walt Maddox*

TUSCALOOSA, AL — Every year, millions of tax dollars generated in our communities are quietly diverted elsewhere, and most Alabamians have no idea it’s happening.

That’s because the Simplified Sellers Use Tax (SSUT) program, despite good intentions, has evolved into a system that shortchanges local governments, confuses taxpayers, and benefits large corporations.

Over the next few weeks, we’ll break down some of the most common myths surrounding SSUT, and we’ll use facts, data, and common sense to help make this complex issue easier to understand.

Myth 1: One of the most common myths that we hear is that SSUT is a use tax for an “internet-based transaction," and NOT a sales tax.

This is simply not the case. Since the U.S. Supreme Court’s Wayfair v. South Dakota (2018) decision, states can require out-of-state online retailers to collect the same local sales taxes as in-state businesses. Dozens of states already do this successfully.

Alabama simply chose not to modernize, thus, SSUT has remained voluntary. Tennessee and Louisiana, which are states with similar tax structures, have already implemented destination sourcing.

The Alabama Department of Revenue (ADOR) even treats SSUT as sales taxes. It is ADOR who provides refunds for overpayment on sales and use taxes on SSUT. This is a link to ADOR’s website.

At the end of the day, SSUT was created as a substitute for state and local sales tax. Alabama adopted SSUT precisely to capture the sales tax revenue lost to e-commerce.

Pretending it has nothing to do with sales tax is rewriting history.

If SSUT is meant to stand in for local sales tax, then common sense demands it should mirror local rates and distribution as closely as possible.

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.