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Tuscaloosa Today
By the People, for the People
Tuscaloosa City Schools Drops SSUT Lawsuit, Seeks Legislative Fix
District joins city in dismissing lawsuit, aims to work with state lawmakers on online sales tax distribution formula
Published on Feb. 11, 2026
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Tuscaloosa City Schools (TCS) has joined the City of Tuscaloosa in dropping its lawsuit challenging the state of Alabama's distribution of Simplified Sellers Use Tax (SSUT) revenue. The district says it will instead seek a legislative fix during the current session, working collaboratively with state leaders and other stakeholders to reach a fair solution on how online sales tax revenue is distributed.
Why it matters
The current SSUT distribution model pools revenue generated from online sales in Tuscaloosa and redistributes it across Alabama, rather than keeping it in the local community. This has been a point of contention for Tuscaloosa's city government and school district, who argue that locally generated tax dollars should support local schools, teachers, and students.
The details
TCS says it agreed to dismiss the lawsuit at the request of legislative leadership, in order to allow time for a potential remedy during the 2026 Regular Session. The dismissal was filed without prejudice, meaning the district retains the option to refile the lawsuit if a legislative resolution is not reached. District officials say they remain actively engaged with state leaders and other stakeholders as discussions continue.
- The lawsuit was initially filed in August 2025.
- TCS and the City of Tuscaloosa voluntarily dismissed the lawsuit on February 11, 2026.
- The 2026 Regular Session of the Alabama Legislature is set to adjourn on March 27, 2026.
The players
Tuscaloosa City Schools (TCS)
The public school district serving the city of Tuscaloosa, Alabama.
City of Tuscaloosa
The local government of Tuscaloosa, Alabama.
Alabama Legislature
The state legislature of Alabama, which is currently in session.
Mike Daria
The superintendent of Tuscaloosa City Schools.
What they’re saying
“Our priority is ensuring that locally generated tax dollars support classrooms, teachers and students in our community. We believe working collaboratively during the legislative session gives us the best opportunity to reach a fair solution.”
— Mike Daria, Superintendent, Tuscaloosa City Schools (Patch)
What’s next
The Alabama Legislature's 2026 Regular Session is set to adjourn on March 27, 2026, representing a critical window for Tuscaloosa City Schools and state lawmakers to address concerns about the SSUT distribution formula.
The takeaway
This case highlights the ongoing debate over how online sales tax revenue should be distributed, with local governments and school districts arguing that locally generated funds should stay within their communities. The dismissal of the lawsuit signals a shift towards a collaborative, legislative approach to finding a solution that works for all stakeholders.
