Mobile and Hoover announced Wednesday they will voluntarily dismiss their legal challenges to the state’s handling of the Simplified Sellers Use Tax to give legislators a chance to fix “a system that threatens critical funding for Alabama cities,” according to a Mobile release.
In December, Mobile joined Tuscaloosa’s lawsuit and Hoover filed its own suit over the SSUT structure, citing significant and growing financial losses. At the request of legislative leadership, both cities will now dismiss their claims to pursue a quicker legislative fix during the 2026 Regular Session.
Hoover stressed the dismissal is without prejudice, preserving its right to refile if lawmakers fail to deliver a fair and timely resolution. Mobile said the move keeps its legal options open while it negotiates in good faith with the Legislature.
“It’s encouraging that our legislative leaders are willing to work toward an immediate solution to a system that is outdated and that has not kept up with best practices used in other states,” Mobile Mayor Spiro Cheriogotis said. “Our position has not changed, but the fastest and most responsible way to fix the current SSUT framework is in the Legislature. We are ready to work with anyone who is serious about creating a system for online sales taxes that is fair to every Alabama community.”
Hoover Mayor Nick Derzis said the lawsuit was necessary to highlight the urgency of reform. “The status quo is untenable,” Derzis said. “Hoover is losing roughly $10 million each year under this structure. Those are Hoover tax dollars, and our residents expect those dollars to support their police officers, firefighters, infrastructure improvements for our parks, streets, and stormwater, and other essential city services—not to be redistributed elsewhere. Filing the lawsuit made it clear that we are serious about fixing this problem.”
Created in 2015, SSUT imposes a flat 8 percent statewide tax on online sales regardless of where the purchaser lives. The program was designed to address the difficulty of collecting sales tax from online retailers, but while federal case law and other states have modernized their systems, Alabama has not.
Derzis said dismissing the case shows good-faith leadership and gives lawmakers room to act. “Whenever a mutually negotiated solution can be achieved, that is the preferred course,” he said. “By dismissing our claims now without prejudice, we are giving the Legislature the opportunity to modernize this system in a way that protects Hoover and other municipalities while also safeguarding the State’s General Fund. We understand that balance must be achieved.”
He added that Hoover’s resolve remains firm. “We expect meaningful reform,” Derzis said. “If the legislative path fails to deliver the fair resolution we expect, we will promptly refile our lawsuit and continue pursuing an equitable outcome through the courts.”
Cheriogotis called the session, which ends March 27, a critical opportunity to resolve the issue and noted it is the first time his administration has been directly involved in SSUT discussions in Montgomery.
