By Ralph Chapoco
Chattanooga Times Free Press, Tenn.
(TNS)
The chair of the Alabama Senate committee overseeing the state’s general fund has filed two bills aimed at pressuring several cities to drop a lawsuit challenging the state’s internet sales tax, known as the Simplified Sellers Use Tax.
Senate Bill 36, sponsored by Sen. Greg Albritton, R- Atmore, would allow people living outside a city to petition the municipality for refunds for sales and use taxes paid on purchases they made in the city.
A second bill, SB 37, prevents local municipalities from collecting sales and use taxes from people who travel to their area to purchase items.
This makes the tax system more fair for rural Alabama,” Albritton said in an interview. “It allows the destination monies, the taxes that are paid on transactions, to be carried forward to the destination.”
A third Albritton bill, SB 150, reallocates a $10 fee that municipal courts collect to pay for operations to the state General Fund.
The plaintiffs in the lawsuit criticized Albritton’s proposals last week.
“Sen. Albritton’s two bills would defund police departments, bankrupt school systems and freeze economic development in every municipality in Alabama,” a spokesperson for the city of Tuscaloosa said in a statement.” Sen. Albritton publicly threatened retribution and appears to be delivering with this proposed legislation.
“For nearly a decade,” the spokesperson said, “multiple cities have engaged the Alabama Department of Revenue and the Legislature to fix the legal issues with Simplified Sellers Use Tax.”
That tax has been a stabilizing revenue stream for the general fund, which for years struggled with rising program costs and flat revenue growth. The education trust fund, a separate budget that pays for public education, gets nearly all of the state’s income and sales tax revenues, and most general fund revenues prior to the Simplified Sellers tax tended to show flat annual growth.
‘Take their money’
The lawsuit, filed in August against the Alabama Department of Revenue, seeks to remove several companies from the Simplified Sellers program.
The lawsuit alleges that the Simplified Sellers Use Tax is unconstitutional and that the Alabama Department of Revenue, the state agency responsible for administering it, is allowing companies to take part in the program that allows them to collect a reduced sales tax rate of 8%, compared to some municipalities that levy a higher percentage through a traditional sales tax.
The plaintiffs in the lawsuit include the cities of Tuscaloosa, Mountain Brook and Montgomery and the Alabama Education Association, which represents K-12 teachers in the state.
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Albritton has been an outspoken critic of the lawsuit, which he sees as a threat to a critical revenue source for the general fund. The senator, a member of the Contract Review Committee, twice delayed state agency contracts in protest of the lawsuit. He said that taxes are within the purview of the Alabama Legislature and not within the jurisdiction of the judicial branch of government.
“They are trying to steal my money,” Albritton said, “so I am going to take their money.”
The plaintiffs want a state court to disqualify several larger retailers with a significant presence in the state because Simplified Sellers was originally meant to apply sales taxes to transactions from Alabama residents who make purchases online from retailers that are not based in the state.
The city of Tuscaloosa alleges in the lawsuit that Simplified Sellers is creating a shortfall in revenues of about $14.6 million.
Alabama is allocated a portion of the sales taxes collected from brick-and-mortar stores, but the money is directed toward the educational trust fund budget. That is not the case with taxes gained from online sales, which are given to the general fund budget. Disqualifying retailers from Simplified Sellers would redirect the sales tax revenues from the general fund budget to the educational trust fund.
The Association of County Commissions of Alabama opposes the lawsuit and has said it could cut critical revenue for counties, which have little to no power to levy their own taxes.
“The position that they are taking on SSUT is not consistent with the position they take on sales tax,” Sonny Brasfield, executive director of the state Association of County Commissions, said in an interview. “In SSUT, their position is if products are sold and wind up in the city limits of Tuscaloosa, then Tuscaloosa should get all the money.”
That is different from sales tax.
“When people drive to Tuscaloosa to shop and make purchases and drive back home to use those products, if we are being consistent in our arguments, then we should let that tax money follow the product back where the product is used,” Brasfield said. “That is the core of their argument in the lawsuit.”
Greg Cochran, the executive director of the Alabama League of Municipalities, an organization that represents cities, said in an interview that the group plans to meet with Albritton “and talk to him about the complexity of trying to exempt nonresidents from paying those local taxes, sales taxes and lodging taxes that come into a municipality, and the chaos that it could create when you have places like Jefferson County and Shelby County that have over 60 municipalities.”
“It would,” he said, “create shopping venues for residents from outside of your district getting incentivized to go next door and shop.”
Graham Smith, the mayor of Mountain Brook, a plaintiff in the lawsuit, said in a statement that plaintiffs were looking for “a modern, thoughtful solution” to the issue.
“Over 20 states have already implemented a more robust and fair way of approaching SSUT,” the statement said. “We welcome any and all discussion with our state representatives.”
Richard Rush, who leads the government relations, external affairs and crisis communications efforts for the city of Tuscaloosa, said that the arguments in the lawsuit are valid.
“The claim that his proposed legislation is in any way comparable to our solutions is preposterous,” Rush said of Albritton in a statement. “Frankly, it is apples to oranges.
“Beyond the impossible implementation of his proposed legislation,” Rush said, “taking Sen. Albritton at face value, when he travels I-65 like hundreds of thousands of others to Montgomery and stops at Bates House of Turkey, he would not pay any sales taxes to the city of Greenville. Greenville’s schools, police, fire and essential services would suffer.
Read more at AlabamaReflector.com.
Photo caption: Alabama state Sen. Greg Albritton. (Facebook)
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© 2026 the Chattanooga Times/Free Press (Chattanooga, Tenn.). Visit www.timesfreepress.com. Distributed by Tribune Content Agency, LLC.
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