Alabama Supreme Court orders Jefferson County to refund occupational taxes

BIRMINGHAM, AL (WBRC) - The Alabama Supreme Court has made a ruling in Jefferson County's occupational tax refund case.

The court sided with taxpayers on an estimated $37 million judgment.  However, the court reversed a previous circuit court ruling that would add $10 million in interest to the total.

In 2009, Dekalb County Circuit Judge David Rains issued a ruling striking down the county's occupational tax.  However, Jefferson County continued to collect the tax while the case was appealed.  Jefferson County has an court-ordered escrow fund in place to pay a portion of the refunds.  To cover the difference, county commissioners hope to take part of the $50 million settlement with J.P. Morgan.

The Jefferson County Commission attorney Matthew Lembke released a three part response involving today's supreme court ruling:

"The Supreme Court's ruling today hands a major victory to Jefferson County that will help fix the County's money problems. First, the Supreme Court held that the trial court made the County pay more than $14 million too much into the escrow account, so those funds should be returned to the County immediately.

Second, while the Supreme Court said that the remaining $37 million in the escrow fund cannot be immediately returned to the County, the Supreme Court also said that the County can recollect the same amount of tax under the 2009 Act. In other words, at the end of the day, the County will be able to keep $37 million in occupational tax collections.

The taxpayers' attorneys are seeking windfall fees of over $10 million, but will have not provided any benefit to their clients. In fact, the taxpayers could end up having to pay more to the County to make up for the amounts paid to their lawyers. Presumably, some of the taxpayers are going to object to their attorneys' request for fees under these circumstances."

Click here to read the ruling.