Mobile and Madison Join Suit For Fair Online Sales Tax
Some state lawmakers and the county commissions association may oppose it, but Tuscaloosa and Mountain Brook's lawsuit against the way the state distributes online sales taxes is gaining traction with other cities. The cities of Madison and Mobile have joined in the suit.
In an online press release, Mobile stated: "Under SSUT, sales taxes collected from Mobilians are being diverted to other communities. In addition to that, ADOR’s management of the program is allowing large online retailers to participate in SSUT instead of collecting the state and local sales taxes that cities like Mobile depend on.
"To protect local tax dollars that support first responders, public infrastructure and essential city services, Mobile is joining the lawsuit against ADOR filed by the City of Tuscaloosa earlier this year."
“If we continue to allow local dollars to be redistributed across the state, cities like Mobile will not be able to maintain the services citizens expect and rely on every day,” Mayor Spiro Cheriogotis said.
During their Tuesday night meeting the Madison City Council, after a half-hour debate voted 5-2 to approve a resolution, "Expressing Support for and Joining the City of Tuscaloosa in Litigation Challenging the Administration of the Simplified Sellers Use Tax by the Alabama Department of Revenue."
An alternate proposal of not joining the suit but instead offering a resolution supporting the suit was defeated.
Madison Mayor Ranae Bartlett, herself a former council member, addressed that issue, saying that the court created a Dec. 10 deadline for cities to join the suit, and the city only became aware of that around Thanksgiving. She said that had she known of the deadline sooner, she would have likely brought it up at the council’s October work session.
The lawsuit argues that the current Simplified Sellers Use Tax, often abbreviated SSUT, system does not treat online and in-person sales equally. 50 percent of the 8 percent Simplified Sellers Use Tax (SSUT), goes to the state, while 30 percent goes to municipalities and 20 percent goes to the county. The plaintiffs in the case claim that percentage split takes dollars away from funding city services.
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