A recent lawsuit filed by Tuscaloosa Mayor Walt Maddox would put Alabama’s entire online sales tax program in jeopardy, according to Houston County Commission chairman Brandon Shoupe.
Shoupe said in an interview with 1819 News on Thursday, “If the lawsuit is successful, potentially the entire program is in jeopardy and will possibly be declared unconstitutional.”
The state’s online sales tax law is known as the Simplified Sellers Use Tax (SSUT) program. Half of the 8% online sales tax goes to the state, and the other half goes to cities and counties.
“Of course, there will be appeals and that sort of thing that may take years. All the while that’s happening, we’re going to be forced to put the money in escrow, and we won’t be able to use those funds to make our budget,” Shoupe said. “To Houston County, which I know all counties are different, we have about a $31 million general fund in terms of revenue. That will be a $4 million hit. That is huge, 4 out of 31 is a pretty big number when you’re running as lean as we do in Houston County. The ironic thing is it will also negatively impact Walt Maddox’s revenue because he will have to do the same thing. He will have to escrow his internet sales tax, and he will not have any funds coming in from that source. I don’t know if he just doesn’t want to know this or has his head in the sand, but he make a lot more money with SSUT than he would without it.”
Shoupe said in a recent video that the lawsuit was a “radical scheme to tax you so (Maddox) can spend more money in Tuscaloosa.”
“He knows he can never get the votes in the Alabama Legislature to gut its own general fund which is why he’s resorted to this lawsuit and it’s one that Houston County along with the 66 other counties in Alabama will ensure it gets defeated,” Maddox said.
The City of Tuscaloosa and the Tuscaloosa City Schools filed a lawsuit against the Commissioner of the Alabama Department of Revenue on August 12 over Alabama’s online sales tax law.
“Alabama’s Simplified Sellers Use Tax takes revenue generated in our community and sends it elsewhere,” Maddox said in a statement after filing the lawsuit. “For nearly a decade, we have proposed legislative changes and attempted to work with the Alabama Department of Revenue to make regulatory updates to fix SSUT. Despite our repeated efforts, our concerns remain unaddressed, leaving us no choice but to take legal action. This lawsuit is necessary to protect the revenue Tuscaloosa has earned and to safeguard our schools, first responders, and small businesses that rely on local dollars staying in the community where they were generated.”
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