Tuscaloosa County Commission Reaffirms Opposition To Internet Sales Tax Reforms

TUSCALOOSA, AL — The Tuscaloosa County Commission on Wednesday adopted a resolution reaffirming its longstanding position that state lawmakers should reject any legislative efforts that could weaken or dismantle Alabama’s Simplified Sellers Use Tax program, known as SSUT.

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Created in 2015 and known commonly as the state's internet sales tax, SSUT allows the state to collect use taxes from online and out-of-state sellers on behalf of Alabama consumers.

The county commission says that since its enactment, it has generated more than $4.2 billion in revenue for the state’s General Fund, Education Trust Fund, and county and municipal governments, according to the commission.

Still, in recent years, larger municipalities like the City of Tuscaloosa and its Mayor Walt Maddox have been vocal in calling for reforms from the legislature and the Alabama Department of Revenue (ADOR), namely in how the revenue is distributed.

ALSO READ: Understanding Tuscaloosa's Tug-Of-War Over Internet Sales Tax

For instance, Maddox says that while a 10% sales tax is levied on brick-and-mortar retailers, only 8% is levied on online sales in Alabama, even if the company has a physical place of business.

District 1 Commissioner Stan Acker has been quite vocal in his opposition to any changes to the current model, telling Patch that it is constitutionally sound and a model for other states/

"This uniform rate for online sellers is fair and equitable to the state, all 67 counties and all municipalities, both large and small, because everyone receives a proportional distribution based on population," he said. "Large cities receive far more than small cities, but under the current system, at least the small cities receive critical funding for local services as do counties."

Changes to SSUT have been strongly opposed by the Association of County Commission of Alabama (ACCA) and lawmakers representing smaller cities and towns in poorer areas of the state, like Alabama's Black Belt.

“We think the simplified sellers use tax is well within the constitutional framework that the U.S. Supreme Court gave us in the (South Dakota v.) Wayfair case, and to make any changes puts the money at risk,” ACCA Executive Director Sonny Brasfield told the Alabama Reflector on Wednesday.

Acker then said proposals to take funding from smaller cities and counties to concentrate revenue in only the 10 largest cities would be crippling to many counties and smaller cities and "clearly unfair to all of the citizens."

"The current model that uses population as the basis for distribution is the only truly fair model for all the citizens of Alabama whether they live in Huntsville which is the largest city by population in Alabama or in a small rural town like Coker here in Tuscaloosa County," Acker said. "The current model ensures both Huntsville and Coker receive a proportional share of the internet tax based on their populations. Changing that is simply not the correct course for the state and is the reason that the Tuscaloosa County Commission has again voted unanimously for the resolution expressing our opposition."

As municipalities continue the push for reforms, the City of Tuscaloosa and Tuscaloosa City Schools (TCS) recently filed a highly anticipated joint lawsuit in August that accused ADOR of unconstitutionally allowing major online and national retailers to avoid paying traditional local sales taxes through the state’s Simplified Seller’s Use Tax (SSUT) program.

The City of Mountain Brook also joined Tuscaloosa as a plaintiff in the lawsuit against ADOR.

Patch previously reported that Tuscaloosa projects a $14.6 million revenue loss this fiscal year from the program's current distribution model, which Maddox says also blocks municipalities from auditing participants’ sales — another sore spot for city officials, who have claimed that such data has not been made available by ADOR to municipalities seeking to better understand the numbers.

"After we review the Tuscaloosa County Commission’s resolution, the City will provide a written response," Maddox said in a statement to Patch after the resolution was passed on Wednesday. "The Commission represents nearly 115,000 citizens and taxpayers of the City of Tuscaloosa, and the resolution warrants a thoughtful and comprehensive reply."

The Alabama Legislature is expected to once again take up tax and revenue legislation when it convenes in 2026.

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