Mobile moves to join lawsuit challenging state’s handling of internet sales tax
Dec 8th, 2025
Posted in: Press ReleaseMayor
Mobile, Ala. — The City of Mobile is joining a lawsuit against the Commissioner of the Alabama Department of Revenue (ADOR) over the state’s handling of the Simplified Sellers Use Tax (SSUT).
Established in 2015, SSUT is a statewide 8 percent tax collected on online sales. These taxes are collected by the state at this flat rate regardless of where the purchase is made — creating higher taxes on Alabamians in rural areas and reducing revenues in cities that depend on sales taxes to operate.
Under SSUT, sales taxes collected from Mobilians are being diverted to other communities. In addition to that, ADOR’s management of the program is allowing large online retailers to participate in SSUT instead of collecting the state and local sales taxes that cities like Mobile depend on.
To protect local tax dollars that support first responders, public infrastructure and essential city services, Mobile is joining the lawsuit against ADOR filed by the City of Tuscaloosa earlier this year.
“If we continue to allow local dollars to be redistributed across the state, cities like Mobile will not be able to maintain the services citizens expect and rely on every day,” Mayor Spiro Cheriogotis said. “Mobilians’ tax dollars should be reinvested in their own community to enhance public safety, support economic development and improve local infrastructure. Instead, we are losing $34 million a year to SSUT, and this problem is only going to get worse as online sales continue to grow.”
Mobile’s move to join Tuscaloosa’s lawsuit comes after years of good faith efforts to work with the Alabama Legislature and ADOR in hopes of finding an administrative fix to SSUT.
Among other things, the lawsuit challenges ADOR’s practice of allowing companies with a clear physical presence in Alabama to participate in a program that was originally intended for out-of-state sellers. By opting into SSUT, these companies can avoid collecting and remitting the state and local sales taxes they are required to under Alabama law.
Despite joining the lawsuit, Mayor Cheriogotis and other city leaders are committed to continuing to work with the state legislature to find a remedy that protects local tax dollars, keeps rural Alabamians from being overtaxed, and prevents a negative impact on state revenues from SSUT.
“Whether you live in a small town or a major city, every Alabama community deserves to be treated fairly,” Cheriogotis added. “The current SSUT structure isn’t fair to anyone, and left unchanged, this system will continue to decimate municipalities across the state. Mobile cannot sit on the sidelines while these critical decisions about our city’s future are made in the courts.”