Tommy Tuberville Keynotes Tuscaloosa Summit on Online Sales Tax

More than 150 mayors, school leaders, and city officials were in Tuscaloosa on Monday morning for a discussion about online sales tax revenue in Alabama and to hear from Republican Senator and gubernatorial candidate Tommy Tuberville.

The meat and potatoes of the summit reiterated Mayor Walt Maddox’s warnings about Alabama’s Simplified Sellers Use Tax, the 8 cents per dollar sales tax applied to online sales.

Maddox has said the status quo costs the city millions every year – more than $12 million last fiscal year, and more than $14 million in Fiscal 2025.

Online shopping is surging in popularity, and more revenue is being collected under the SSUT sales structure, which is then distributed to all 67 counties and over 400 municipalities based on their population. Maddox has called it a “socialist” wealth redistribution plan in which money generated by orders made, fulfilled, and distributed in Tuscaloosa then gets shared with hundreds of other communities statewide.

The system gives larger cities, such as Tuscaloosa, pennies on the dollar compared to the revenue they would earn through traditional sales tax.

Online sales tax is also 8 cents on the dollar statewide, which Maddox said hurts small businesses in cities like Tuscaloosa, where local sales taxes at brick-and-mortar are 10 cents a dollar. He said it also overcharges rural communities where the traditional sales tax can be as low as 5 cents.

The online sales tax structure also gives no money to the Tuscaloosa City Schools, which rely on revenue from local sales to hire teachers, principals and other staff.

Now, the Tuscaloosa City Council and the TCS Board of Education have both voted to allow lawsuits against the Alabama Department of Revenue regarding the distribution of tax revenue generated from online sales.

Maddox said it’s only the second time in his 25 years in city government that he has supported legal action against the state – the last time it happened was in 2009, when the city sued the state to block former Governor Bob Riley’s proposed sale of Bryce Hospital.

He also said he expects many more municipalities to join the legal fight following city elections in most of the state next month.

Mayor Maddox said the Monday summit was well-attended and demonstrated the interest of many stakeholders in learning more about how SSUT impacts their communities.

“I think if attendance is any indicator, you can see this is an important issue across the state, whether it’s the municipal governments, whether it’s school systems, whether it’s agencies that are impacted by it,” Maddox told local media. “Other communities now are beginning to wrap their arms around the losses that they’re seeing, whether it’s in their local governments or whether it’s in their school system. So, the more we discuss it, the more educated people become, the more we have an opportunity to solve it with the Alabama legislature.”

Maddox said the state is reluctant to share comprehensive data about the impact SSUT has statewide, but he believes this is a rural issue as well as one affecting the state’s larger cities, such as Tuscaloosa.

The Tuscaloosa mayor told reporters that the city’s SSUT lawsuit will be filed soon and will attempt to demonstrate that the Alabama Department of Revenue “overstepped its boundaries” in establishing the current structure.

Senator Tuberville’s keynote address was more of a gubernatorial stump speech than an informed address on the topic at hand, SSUT, but leaders across the state showed up in droves to listen and gave Tuberville ovations before and after his talk.

“There’s a lot of good things going on in our country, but we do have a lot of problems,” Tuberville said. “Those problems filter all the way down to communities all over the country, especially like here in Tuscaloosa, all the way over to Birmingham, all the way down the southern part of the state.”

Tuberville primarily discussed the federal deficit, an almost $37 trillion problem he said must be addressed through tariff revenue and spending cuts, rather than additional taxes.

The Senator also explained his decision to run for governor in Alabama after a term in Washington, D.C., saying that power and money are coming back to the states, and he wants to be the leader who oversees that shift in the future.

“This is not an ego deal. I couldn’t care less about being governor,” Tuberville said. “I want to be a CEO [for Alabama] to help you and all the mayors and all the people across the state make our communities better.”

Tuberville said the state needs to be keenly focused on energy infrastructure from players like Alabama Power and the TVA as nascent but evolving artificial intelligence technology demands more and more electricity to fuel data centers across the country.

Ever in the mindset of college football, Tuberville said Alabama needs to be ready to compete with Georgia, Florida, Tennessee, Mississippi and Louisiana to recruit new businesses and industries to the Yellowhammer State and he believes he can help navigate those waters with the experience and contacts he has gained in D.C.

In a Q&A session after his address, Tuberville declined to speak in depth about the SSUT issues for which Maddox called the Summit.

“There’s no way, from the federal side, that we’ll have anything to say about that,” Tuberville said. “This is a problem that goes not just with Alabama but other states. All the mayors are in on trying to work something out. I hate that there has to be a lawsuit from mayors and municipalities through the state government. I wish we could work this out. But again, it’s up to them.”

Tuberville said he will stay informed on the topic and revisit it if elected governor in November next year.

“I’m not here to say whether [cities like Tuscaloosa] are right or wrong,” he said. “I don’t have a dog in that hunt until I take over as governor here in about a year and a half.”

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