As Alabama lawmakers weigh changes to the way hundreds of millions of dollars in online sales tax revenue are distributed, Madison County is making its case for why counties should keep their share.
The county is pointing to public safety spending as evidence of the importance of revenue from Alabama’s Simplified Sellers Use Tax, or SSUT, which has become the subject of a tug-of-war among counties, cities and school systems over how the growing pot of online sales tax money should be divided.
In a press release, Madison County said SSUT revenue helped support its investment in law enforcement during fiscal 2026 as counties across Alabama faced rising costs for sheriff’s departments, jails and inmate medical care.
“Our citizens count on law enforcement each and every day, and it’s our responsibility to ensure those services remain strong,” Madison County Commission Chairman Rex Vaughn said.
“Maintaining that level of service requires significant resources, and SSUT revenue helps ensure we can continue funding the deputies, equipment, jail operations and other critical functions that keep our communities safe.”
The argument comes as the future of the SSUT distribution system remains under discussion in Montgomery.
Earlier this year, a coalition of municipalities and school systems voluntarily dismissed litigation challenging the state’s SSUT system while lawmakers worked toward a possible legislative solution. Madison and Madison City Schools were among the entities that had joined the legal challenge.
The SSUT program applies a flat 8% tax to purchases from participating remote sellers. Half of the revenue goes to the state, while the other half is divided between local governments, with 40% of the local share going to counties and 60% to municipalities. Local distributions are based on population rather than where an online purchase was delivered.
Cities and school systems challenging the system have argued the structure costs them revenue they would otherwise receive under local sales tax rates.
Counties, meanwhile, are mounting their own case for preserving the revenue stream.
The Association of County Commissions of Alabama said counties collectively spent nearly $1 billion on law enforcement services in fiscal 2026, including more than $570 million for sheriff’s departments, nearly $400 million for jail operations and more than $70 million for inmate medical care.
“In most counties, the revenue from SSUT is the only growing source of revenue,” ACCA Executive Director Sonny Brasfield said. “Without it, most county expenditures would be stagnant.”
Brasfield said law enforcement and jail operations represent counties’ largest expenditures, giving county governments a significant stake in the SSUT debate.
For Madison County, the message ahead of the new fiscal year is straightforward: Online sales tax revenue has become part of paying for public safety, and county leaders don’t want to lose it.
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