Debate Heating Up Over Online Sales Tax Lawsuit
As lawmakers head back to Montgomery today for the first full week of the 2026 legislative session, much talk in the statehouse corridors will center around the Simplified Sellers Use Tax (SSUT) lawsuit filed by Tuscaloosa and other larger cities.
The cities are challenging the legality of the state’s 8% flat tax on online sales, putting them at odds with the Alabama Department of Revenue (ADOR), which is the defendant in the lawsuit.
The SSUT totaled $963.3 million in fiscal 2025. Up significantly from $851.1 million in 2024 and $386.3 million in fiscal 2020. The SSUT contribution to the General Fund in fiscal 2025 was $357.5 million, nearly 10% of the funds nearly $3.58 billion. Concern over loss of funds due the lawsuit has split larger cities from smaller cities and some cities from counties.
Opposition to SSUT Is Growing
Brasfield and county commissioners across the state are recruiting smaller cities to oppose the suit. He released a list of 140 cities that have taken the ACCA's side. That list includes several smaller cities and towns in Tuscaloosa County and West Alabama, including Carrolton, Centreville, Coaling, Cordova, Demopolis, Detroit, Eutaw, Linden, Moundville, Vance, West Blocton, and Woodstock, among others.
The Tuscaloosa County Commission has also voiced opposition to the SSUT lawsuit.
The Association of County Commissions of Alabama has mounted an offensive to oppose the suit which Executive Director Sonny Brasfield is warning, if successful, "...could lead to significant revenue losses and cuts to essential county services."
"Counties rely heavily on SSUT revenue to meet rising operational costs, and any reduction would effectively defund county law enforcement, Brasfield, a Tuscaloosa native, stated in a press release. He points out counties, unlike cities, do not have the authority to raise revenue due to lack of home rule in Alabama.
ACCA has picked up a supporter in Alabama Sheriff's Association Executive Director Huey "Hoss" Mack who claims, “If there was any of this money that were to be taken away, it would compromise public safety,”
State Senate General Fund budget committee chairman Sen. Greg Albritton (R-22) has called the lawsuit a “money grab” by municipalities and said they agreed to this structure in legislation a decade ago. He has made not so veiled threats against the plaintiff cities if they go through with the suit.
Maddox: Larger Cities Ran Out of Options
Tuscaloosa Mayor Walt Maddox, who has actively pushed the suit for months, counters Brasfield's concern by emphasizing dozens of cities and school systems are already dealing with those difficulties described by Brasfield.
"Cities across the state have been working with ADOR and the legislature for nearly a decade regarding the SSUT's legal liabilities," Maddox responded to a Tuscaloosa Thread request for comment. "Seeking the intervention of the courts was a decision not taken lightly; however, as online sales grow exponentially, our schools, police departments, fire and rescue services and other essential services were out of time."
Maddox highlights the fact that most online purchases occur in large cities, but they are getting shortchanged by the way the revenue is setup.
Although a 2018 U.S. Supreme Court ruling allowed states to collect sales taxes from remote sellers for in-state purchases., plaintiffs in the case say that doesn't mean the system is not flawed.
A hearing in the lawsuit is set for March 4th in Montgomery Circuit Court. Maddox and Brasfield each has said they are will to sit down and discuss the issue.
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