MORGAN COUNTY, Ala.- The court battle continues for who should get portions of online sales tax in Morgan County; the County Commission or the School Systems.
On Wednesday, the Alabama Supreme Court heard arguments on both sides of the case regarding school funding from online sales tax.
This case concerns the Morgan County Commission seeking to overturn a law passed by the legislature in 2019, sponsored by Senator Arthur Orr, which says the commission must forward tax money collected under the Simplified Sellers Use Tax (SSUT), also known as the online sales tax, to local schools and volunteer fire departments.
According to that law, a portion of the online tax should be going to the three school systems Morgan County Schools, Decatur City Schools, and Hartselle City Schools. The county commission says the law is unconstitutional.
The Alabama Education Association filed a lawsuit, which was later joined by several local superintendents and school districts, against the commission.
A Montgomery County circuit judge upheld the tax, ordering the commissioners to distribute all but 5% of the online sales tax. The commission would keep 5%, volunteer fire departments 1.5% and the other 93.5% will be divided among Morgan County Schools, Decatur City Schools, and Hartselle City Schools but the commissioners have appealed.
The money involved is substantial. Since the suit was filed in October of 2019, nearly $3 million of online sales tax has been collected.
“The children of Morgan County are now suffering because the money that they would have had to do many things, school repair, supply money, for different programs would be very helpful and useful to them and had been included in their budgets,” says AEA Associate Executive Director Theron Stokes.
The law was passed prior to the pandemic, which only boosted online sales. The Alabama Education Association says that solidifies the need for schools to get online sales tax.
“Online sales in not in the future, it is now. Right now we have more people shopping online,” says Stokes.
Morgan County Commission Chairman Ray Long says local sales tax from brick and mortar stores were up around 10% in 2020 in comparison to 2019 across Morgan County. Long says that also results in more funding for the school systems.
The disputed money is in a holding fund until the case is settled. And now all parties involved are waiting for a final decision to be handed down from the Alabama Supreme Court.
Chairman Long tells News 19 they stand by the belief that the law is legislative overreach saying, despite being on opposite sides of a legal battle, the Morgan County Commission has long been and continues to be a supporter and advocate for all school systems in the county.