Tax Continues, For Now

The Alabama Supreme Court ruled Tuesday that Jefferson County can continue to collect an occupational and business license tax while appealing a lower court decision that it's unconstitutional.

The tax is a major source of revenue for the county's general fund budget.

In early December, circuit Judge Charles Price struck down the tax with a prospective ruling that a bill authorizing the county to implement the tax last year was improperly advertised prior to a vote by the state Legislature. Attorneys for the county filed a notice of intent to appeal Price's decision. They also asked the state Supreme Court to stay or modify Price's ruling to allow the county to continue collecting the tax pending the appeal.

Justices denied the county's motion for a stay, but modified the ruling and allowed the county to continue to collect the tax pending appeal. They ordered the revenue placed in escrow.

Four or five new county commissioners were seated following the Nov. 2 election and are in the process of reviewing the budget. The board has yet to hold a public discussion about how they plan to deal with nearly $3.2 billion of outstanding variable-rate and auction-rate sewer warrants on which the county has defaulted.

While the occupational tax dispute makes its way to the state Supreme Court, the county budget crunch may be alleviated by the receipt of $75 million as part of a settlement between the Securities and Exchange Commission and JPMorgan in November 2009.

It resolved securities fraud and other charges associated with the troubled sewer warrants and related interest-rate swaps that Jefferson County sold in 2002 and 2003. JPMorgan was involved with most of them.

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Tax Alabama
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