GUNTERSVILLE — The Marshall County Commission is fighting to keep its fair share of Alabama's Simple Sellers Use Tax following an effort led by several larger cities to change the law in their favor.
On Wednesday, the Commission approved a resolution formally requesting its legislative delegation oppose any efforts to change or question the constitutionality of the state act. The Association of County Commissions of Alabama (ACCA) passed the same resolution last month.
First passed in 2015, the Simplified Sellers Use Tax Remittance Act created a program to collect taxes from online sales made by out-of-state retailers. Currently, the flat tax rate is at 8%. Of that, 50% goes to the state, 30% to municipalities, and the remaining 20% goes to county governments.
According to the Alabama Department of Revenue, the tax collected $851,182,206.25 in fiscal year 2024, of which Marshall County received $3.8 million.
District 2 Commissioner Rick Watson said the revenue from the tax has increased significantly since its inception and represents an important part of the county's budget, specifically helping to pay for a $31 million addition to the county jail.
On August 12, the City of Tuscaloosa and the Tuscaloosa City Schools filed a lawsuit against the State Revenue Commissioner, seeking "regulatory updates," including potentially increasing the flat rate.
"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," Tuscaloosa Mayor Walt Maddox said in a statement after filing the lawsuit.
Marshall County and the ACCA have disputed the claim that the big cities are losing money, arguing that they may have actually been overpaid, as much as $22 million in 2024, according to the ACCA.
Watson said those trying to change the tax law don't simply want to increase the flat tax rate, but rather redo the entire underlying distribution formula.
"They're wanting to get a bigger slice of the pie," he said. "If the legislators allow this to happen, Marshall County will be in a heck of a shape… We're really fighting to keep this and not mess with it. Leave it at 8% for everybody."
Commission chairman John Young said, "Look, it's not just us. All the small cities, all the small counties are involved with what we're trying to do. They're all passing these resolutions. They're all talking to their legislative groups. It's very important."
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