GUEST COLUMN: Unlocking Destination Sourcing For Rural Alabama (Part II)

*This is a column written by Tuscaloosa Mayor Walt Maddox. Click here to read Part I*

TUSCALOOSA, AL — Could destination sourcing benefit rural Alabama? With the technological advances of the last decade, the answer is worth examining. Based on the publicly available data, the answer appears to be yes.

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Rural Broadband Changes the Game

Thanks to Governor Kay Ivey and the Alabama Legislature’s broadband initiatives, residents in rural Alabama no longer need to drive to distant commercial hubs for groceries, electronics, equipment, and more. Today, whether you live in Gordo, Red Bay, Harvest, Thomaston, or anywhere in between, retail has no boundaries—online orders can be delivered right to your door.

A Boost for Local Revenues

Even more promising for rural Alabama, Amazon has stated they will deliver to every doorstep in Alabama. This could be a major windfall for rural municipalities and counties. Is there a way to know for certain? The answer is no, but there are methodologies that can be applied to provide a realistic snapshot. Certainly, if the Alabama Department of Revenue (ADOR) shared the data they already require vendors to collect, a clearer picture could emerge. More on this later…

The Rainsville Example

Let’s look at the City of Rainsville (Rainsville) which has a population of 5,931. If a resident buys a Samsung 48-inch Smart TV for $1,600, Rainsville will receive $64 in sales taxes from that single purchase under destination sourcing.

Let's look at two reliable points of data to see what this would look like for a year's worth of sales tax revenue in Rainsville from just one person shopping only. Rainsville has 4,205 residents over age 18¹, if each resident spends just $3,000 online annually, which is below the state average², Rainsville’s sales tax revenue would be $504,600.

In FY 2024, Rainsville received $451,116 from its SSUT allocation. Destination sourcing could mean more funding—suggesting SSUT may actually be shortchanging rural communities.

Why We Need Transparency

Alabama law already requires SSUT participants to maintain detailed sales records. Sharing this data with legislators, local elected officials and other policy leaders would allow a fact-based conversation about whether rural Alabama is being left behind.

Next week, we’ll look at the “Door Dash Loophole.”

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.

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