Online Sales Tax Distribution Talks Continue As SB347 Dies
With six days remaining in the 2026 Alabama legislative session, Sen. Greg Albritton's (R-22) Senate Bill 347 is dead. The legislation, seen as an initial step toward resolving differences over the way the online sales taxes are distributed in the state, has no consensus according to the longtime lawmaker.
Currently, the methodology used for distribution of the county and municipal shares of the $1-billion Simplified Sellers Use Tax (SSUT) is based on population projections from the U.S. Census Bureau Population and Housing Estimates Program every 10 years. Albritton's bill would have shortened that to five years to better reflect growth.
"We’re just going to have to find another solution,” Albritton said during a telephone interview with Tuscaloosa Thread. That solution will most likely have to come from ongoing discussions between large and small cities, counties, and legislators.
The City of Tuscaloosa and other large municipalities and school systems filed a lawsuit last year alleging the way the 8% flat tax is distributed is causing the larger municipalities, where most online sales occur, to lose money. This, they claim, is depriving the cities of critical local tax revenue for infrastructure and public services.
With pushback from Albritton and the Alabama County Commissions Association (ACCA), Tuscaloosa and the other plaintiffs agreed to drop the suit in favor of negotiations with all involved parties.
SB 347 was intended as a good faith first step in the process of resolving the issue. However, Albritton, after a weekend of studying the numbers, said they did not make sense. Now, with the session running short on time and with competition from the budgets and other major issues, the bill is dead.
Negotiations are expected to resume later this spring in an effort to reach a consensus agreement. However, if substantial progress is now reached, the plaintiffs in the lawsuit have the option of reinstituting the legal action.
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