Tuscaloosa’s Walt Maddox claims his city is being cheated. The Democratic mayor of Tuscaloosa said his city had over fifteen million dollars of sales taxes that were generated locally that were redistributed elsewhere. Several other cities have joined in the lawsuit, but Alabama's Association of County Commissioners is fighting it. Maddox said the judge has ordered the parties to sit down. The judge has recently directed both all parties that are related to this lawsuit to engage into mediation. Maddox is unsure of the details, but attorneys on both sides will hash it out.
The city of Mobile is among the municipalities supporting Maddox’s action. In a news release, Alabama’s Port city said…
“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. “Mobilians’ tax dollars should be reinvested in their own community to enhance public safety, support economic development and improve local infrastructure. Instead, we are losing $34 million a year to SSUT, and this problem is only going to get worse as online sales continue to grow.”
Mobile’s move to join Tuscaloosa’s lawsuit comes after years of good faith efforts to work with the Alabama Legislature and ADOR in hopes of finding an administrative fix to SSUT.
Among other things, the lawsuit challenges ADOR’s practice of allowing companies with a clear physical presence in Alabama to participate in a program that was originally intended for out-of-state sellers. By opting into SSUT, these companies can avoid collecting and remitting the state and local sales taxes they are required to under Alabama law. Despite joining the lawsuit, Mayor Cheriogotis and other city leaders are committed to continuing to work with the state legislature to find a remedy that protects local tax dollars, keeps rural Alabamians from being overtaxed, and prevents a negative impact on state revenues from SSUT,” the city release said.
