Yellowhammer Times

The cities of Tuscaloosa and Mountain Brook have filed a lawsuit against the state of Alabama over its Simplified Sellers Use Tax. The legal action claims that retailers with physical stores in Alabama should be required to collect the same state and local sales taxes on online purchases as they do for in-store transactions, rather than applying the flat 8 percent tax currently used for online sales.

City officials argue that this system reduces funding for local governments and schools. State representatives maintain that the simplified tax provides a consistent revenue stream. The outcome of this lawsuit could impact how online sales taxes are collected and distributed throughout Alabama, potentially affecting municipal budgets and businesses operating both online and in physical locations.

Although the National Federation of Independent Business (NFIB) is not a party to the lawsuit, Rosemary Elebash, NFIB’s Alabama State Director, commented on its significance: “This is something that could affect small businesses all across the state,” she said. “We’ll be watching and will do whatever we can to ensure that small businesses are treated fairly.”