The county commission approved a resolution encouraging the Alabama legislature to oppose any legislation changes that would disrupt the Simplified Sellers Used Tax (SSUT) program operations at the commission meeting on Tuesday.
The SSUT is a program that allows sellers to collect a flat 8% tax on items sold into Alabama from another state, according to the Alabama Department of Revenue. It says the seller is eligible for the program if items are sold from an inventory or location outside the state with no physical presence in the state.
The resolution, formed by the Association of County Commission of Alabama (ACCA) states that the program is “under attack” by a small group of mayors who are critical of the tax. Since it was established, the tax has earned more than $4.2 billion in revenue for the state, the education trust fund, the 67 counties and Alabama’s municipal government, according to the resolution.
Of the 8% collected, the state receives 50%, all counties receive 20% and all municipalities receive 30%. The state splits up its revenue into the general fund, 75%, and the education trust fund, 25%. Municipalities and counties across the state share the revenue brought in by the program.
In April, Tuscaloosa mayor, Walt Maddox, held a summit for mayors against the SSUT, calling it the “biggest threat” to cities in Alabama, according to Tuscaloosa Thread. He said Alabama created a scheme that is “socialism in approach” and punishes those who are investing in the state.
Maddox said the split is unfair to the top 50 cities in Alabama, which have seen a decrease in their budgets while smaller cities have seen a growth.
The ACAA called Maddox’s statement “laughable” in a statement on Lamar County’s website. It states that the revenue is based on population and all citizens are counted as equal in the calculations.
This year, Etowah county received $3.8 million from the program, according to Shane Ellison, Etowah County chief administrative officer. He said the tax makes up for more than 10% of the county’s budget.
“I think in other states, when there is an issue like this, the SSUT gets a big escrow,” Ellison said. “An excess of 10% of our budget, just put it in the bank and hold it there and we’ll see what happens.”
The SSUT simplifies the tax system, which would require more than 4,000 different sales tax rates if the program was not in place, according to the ACCA.
