Tuscaloosa and Mobile mayors argue DoorDash, GrubHub and similar delivery businesses should pay same sales tax as local businesses, and are hoping to seek legislative change.
Published: Jan. 31, 2025, 6:00 a.m.ByThe explosive popularity of food delivery services like DoorDash, GrubHub and Uber Eats has become a growing concern for mayors in some of Alabama’s largest cities.
The mayors hope to close the perceived loophole through legislation during the upcoming spring session in Montgomery. State Sen. Arthur Orr, R-Decatur, who chairs the state’s education budget committee, believes lawmakers would be open toward reform, stating, “I could definitely see that debate or conversation coming forward and getting some airtime.”
“Going into that law and tinkering with the definition of a marketplace facilitator, will put the whole program at risk,” Brasfield said. “Counties will not be supportive that in any shape, form or fashion.” Under the 9-year-old SSUT, half of the revenue from the 8% goes to the state and the other half to cities and counties.
The mayors say that rural communities might have more to lose, even as they tend to generally receive more revenue from the SSUT. As younger consumers continue to shop more online Stimpson said more retailers will figure out that they can be taxed at a lower rate through the marketplace facilitator scenario. He said physical stores – Dollar General, Dollar Tree, and Walmart – that dominate the sales tax landscape in rural communities “will evaporate, and the taxes disappear.
Frank Miles, spokesperson at ADOR, agreed with Brasfield in saying a change to the SSUT could jeopardize the foundation of the SSUT that was put into place after the U.S. Supreme Court’s decision in, the landmark court case that provided a platform for states to collect taxes from online sales.
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