MONTGOMERY, Ala. – Alabama Sen. Greg Albritton, R-Atmore, placed temporary holds on four legal contracts Thursday in response to a lawsuit filed by two cities over how the state distributes revenue from online sales taxes.
Albritton, who serves on the Legislature’s Contract Review Committee, used his authority to delay three contracts for Legislative Services and one for the Alabama Board of Pharmacy. His decision followed an August lawsuit from the cities of Tuscaloosa and Mountain Brook that challenges the structure of the Simplified Sellers Use Tax, known as SSUT.
The lawsuit argues that SSUT violates the Alabama Constitution because it allows online retailers to charge an 8 percent tax instead of the higher combined local rates paid by brick-and-mortar stores. Tuscaloosa Mayor Walt Maddox has estimated his city loses nearly fourteen and a half million dollars a year under the current system.
Albritton said the lawsuit disrupts state revenues and that cities should bring their concerns to lawmakers rather than to the courts.
“When you start pulling a lawsuit against the state and interfering with the revenue flow, and now the same cities that’s bringing this suit, and the same lawyers bringing this through them, are coming to the state asking for more monies to fund things that they want and need. I can’t get blood from the turnip, so to speak,” Albritton said. “So I’m just trying to send a message that if they got a problem, come talk to us.”
Maddox said the lawsuit was not filed lightly and that the issues with SSUT have grown more serious over time.
“Seeking a legal remedy is not something we’ve taken lightly. Our responsibility is to protect our citizens, educate our children, and invest in our future,” Maddox said in a statement. “As is evident from recent Black Friday and Cyber Monday data, the issues of SSUT are growing exponentially. This is dangerous to the fiscal viability of cities and schools that depend upon locally generated sales taxes.”
Albritton said cities have other options if they believe they are not collecting enough revenue.
“You know, they can raise the taxes. And all they need is three votes, or two votes, or whatever, to get it done,” he said. “Here, we have to deal with 140 people, plus the governor. So if they want to raise the tax, and they want to improve their revenue, or they want to tax something different, they can.”
State law allows any single member of the Contract Review Committee to place a 45 day hold on a contract. The committee does not have the authority to cancel agreements. Albritton did not rule out delaying additional contracts as the 2026 legislative session approaches.
The lawsuit remains active, and lawmakers have not indicated whether SSUT reform will be considered when the Legislature reconvenes in January.
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