The Alabama Education Association (AEA) filed a suit in the litigation challenging Alabama's Simplified Sellers Use Tax (SSUT) on Wednesday.
The SSUT is an 8% tax applied to online and other remote sales by sellers without a physical presence in Alabama.
As online commerce has surged, SSUT revenues have grown dramatically, exceeding $851 million statewide in 2024, according to the Alabama Department of Revenue. Despite this growth, Alabama's schools continue to receive a "disproportionately small share of these funds," according to the AEA.
"The current application of the SSUT shortchanges Alabama's local schools," said Theron Stokes, AEA associate executive director. "Allowing remote sellers to remit the SSUT instead of remitting traditional state and local sales taxes diverts millions of dollars away from the Education Trust Fund and local school systems — money our schools desperately need."
The AEA joins larger municipalities in the litigation against Alabama's online sales tax law. The Association of County Commissions of Alabama opposes the lawsuit. State Sen. Greg Albritton (R-Atmore) has said the lawsuit "threatens the fiscal viability of the state."
The lawsuit challenges the Alabama Department of Revenue's administration of the SSUT, arguing it is inconsistent with Alabama law.
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