To promote educational excellence, the Alabama Education Association serves as an advocate for its members and leads the advancement of equitable and quality public education in Alabama.
AEA Files Lawsuit to Protect School Funding
On Tuesday, December 10, the Alabama Education Association (AEA) filed a lawsuit challenging the state’s administration of the Simplified Sellers Use Tax (SSUT), reinforcing its long-standing commitment to protecting fair and equitable funding for Alabama’s public education system.
The SSUT is an 8% tax applied to online and other remote sales made by sellers without a physical presence in Alabama. Under the current structure, only one-eighth of that tax — effectively just 1% — is directed to the Education Trust Fund (ETF), which supports K-12 schools, colleges, and universities across the state. The remaining revenue is largely diverted away from public education. By comparison, nearly all proceeds from Alabama’s traditional sales tax are dedicated to the ETF and local school systems.
As online shopping has expanded rapidly, revenue generated by the SSUT has grown substantially. According to the Alabama Department of Revenue, SSUT collections exceeded $851 million statewide in 2024. Despite this significant growth, public schools continue to receive only a small fraction of the revenue generated by online sales.
“The current application of the SSUT shortchanges Alabama’s local schools,” said Theron Stokes, Associate Executive Director of AEA. “Allowing remote sellers to remit the SSUT instead of traditional state and local sales taxes diverts millions of dollars away from the Education Trust Fund and local school systems — money our schools desperately need.”
The lawsuit challenges the Alabama Department of Revenue’s administration of the SSUT, arguing that it is inconsistent with existing state law. While the SSUT was originally designed as a temporary solution during a period when states were prohibited from taxing remote sellers, AEA contends that subsequent legal changes have rendered the structure outdated and detrimental to public education funding.
Through this legal action, AEA seeks to ensure that educators, students, and communities that rely on public schools have a voice in ongoing decisions regarding internet sales taxation in Alabama. The association argues that as online commerce continues to grow, the tax system must evolve in a way that is fair, lawful, and aligned with the state’s constitutional commitment to adequately fund public education.
“When school funding is at risk, AEA will act,” Stokes said. “We will always stand for a tax system that ensures public education receives its rightful share.”
The lawsuit marks the latest effort by AEA to advocate for policies that strengthen Alabama schools and protect the financial resources necessary to serve students across the state.