Association director warns Montgomery County of risk to simplified sellers use tax revenue

Sonny Brasfield, executive director of the Alabama County Commissioners Association, briefed the Montgomery County Commission on the state’s simplified sellers use tax (SSUT) and urged passage of a resolution urging the legislature not to alter the program.

Brasfield explained that Alabama’s SSUT, enacted after the 2018 U.S. Supreme Court decision allowing states to require remote sellers to collect use taxes, consolidates out-of-state vendor payments into a single remittance to the Alabama Department of Revenue. The state then divides receipts among the state, counties and cities. Brasfield warned that proposed changes being pushed by some mayors could “make significant and very dangerous changes” to SSUT and risk local revenue.

He provided local figures for the River Region and statewide: since inception the program has generated about $128 million for Montgomery-area local governments and nearly $200 million across the River Region when including surrounding counties, he said. Brasfield also summarized a lawsuit filed by the mayor of Tuscaloosa challenging aspects of the program, including an argument that a large retailer with in-state warehouses should be treated as an in-state entity and thus excluded from SSUT; Brasfield warned that removing a large contributor such as Amazon from SSUT could sharply reduce local receipts.

Nut graf: Brasfield urged the commission to consider a resolution supporting SSUT in its current form to reduce the risk of legislative or legal changes that could remove a significant revenue stream for local governments.

Commissioners asked clarifying questions about the “undue burden” standard from the Supreme Court and whether any localities receive more through SSUT than they would by collecting directly; Brasfield answered that the SSUT structure generally avoids undue administrative burden on vendors and that only localities with sales-tax rates under 8 percent might see anomalies, for which citizens can seek refunds. Nearly 40 counties had already adopted the resolution in support, Brasfield said. Commissioners expressed appreciation for the briefing and for the association’s work on the issue.