Tuscaloosa City Schools Joins City In Dropping SSUT Lawsuit

TUSCALOOSA, AL: — Tuscaloosa City Schools (TCS) joined the City of Tuscaloosa Wednesday in dropping its lawsuit challenging the state of Alabama’s distribution of Simplified Sellers Use Tax (SSUT) revenue, opting instead to seek a legislative fix during the current session.

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As Patch previously reported, Tuscaloosa City Hall announced earlier in the day that it has voluntarily dismissed its SSUT lawsuit and also signaling that it will work with state lawmakers on the long-debated issue online sales tax distribution.

Patch also reported when the district joined other Alabama school systems and municipalities in the initial lawsuit in August.

The SSUT, created in 2015, imposes an 8% flat tax on online purchases statewide. Under the current distribution model, revenue generated from online sales in Tuscaloosa is pooled and redistributed across Alabama, rather than remaining in the community where it was collected.

At the request of legislative leadership, TCS says all parties agreed to dismiss their claims to allow time for a potential remedy during the 2026 Regular Session.

The dismissal was filed without prejudice, meaning TCS retains the option to refile the lawsuit if a legislative resolution is not reached. District officials also said they remain actively engaged with state leaders and other stakeholders as discussions continue.

Superintendent Mike Daria said the district is encouraged by lawmakers’ willingness to revisit the current SSUT distribution formula.

“Our priority is ensuring that locally generated tax dollars support classrooms, teachers and students in our community,” Daria said. “We believe working collaboratively during the legislative session gives us the best opportunity to reach a fair solution.”

With the legislative session set to adjourn March 27, district leaders say the coming weeks represent a critical window to address concerns about how online sales tax revenue affects funding for local schools.

“Our goal is simple,” Daria said. “We want tax dollars generated in our community reinvested in the education of our children and the strength of our local schools.”

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