Circuit Judge Charles Price has ruled that Jefferson County’s latest attempt at imposing an occupational tax is invalid and that the county must stop collecting the tax immediately. Judge Price held that parts of the legislation enacting the tax were not accurately advertised to the public, as required by Alabama’s antiquated Constitution. He did, however, rule that the county would not have to repay the almost $90 million collected since the new tax was enacted.
Readers will recall that Jefferson County’s old occupational tax was previously determined to be illegal in January 2009 because it did not fairly tax all workers in the county. The loss of that tax led to an almost two-month shutdown in county operations in the summer of 2009. Previous versions of the tax have been litigated, almost from its initial imposition in 1988.
Jefferson County, which is in the midst of a long-running financial crisis, has vowed to appeal the ruling striking down the source of 25% of its general fund and has requested that Judge Price allow it to continue to collect the tax until that appeal is decided.
Barring a change in Judge Price’s order, employers who normally withhold the tax from employees’ checks will no longer have to do so until the Judge’s ruling is overturned or a new tax is passed by the Alabama legislature, which does not meet in its 2011 General Session until March. Given the county’s request to Judge Price to continue to collect the occupational tax pending appeal, readers should carefully watch for additional rulings from the court.
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