JeffCo Commission settles occupational tax lawsuit

BIRMINGHAM, AL (WBRC) - The Jefferson County Commission voted Tuesday to settle in the lawsuit over the county's old occupational tax.

The commission voted Tuesday not to object to legal fees. Under the resolution approved Tuesday by the commission, about $20 million colllected in 2009 after the tax was ruled illegal while the ruling was under appeal will be returned to the county.  The remaining $30 million will be used to pay attorney fees and refunds to taxpayers.

In addition, the comission agreed to pay $1.1 million into the escrow account to cover fees for the special master, who will oversee distribution of the refunds.  The commission also agreed not to implement a retroactive tax to recollect the refunds.

Judge David Raines, who declared the county's old occupational tax illegal in January 2009, is expected to rule on the proposed settlement in November. If the settlement is approved, people who work in Jefferson County could see refunds as early as 2011.

A majority of the commission said taxpayers who are a part of this lawsuit will have a chance to object to the legal fees during a future court hearing with Judge Raines.  

"People who paid this rate will be notified," Jefferson County Commission President Bettye Fine Collins said. "They can go to the judge and that hearing and challenge those attorney fees."

Most of the commissioners were critical of large legal fees to be given to the attorneys who brought the lawsuit because it will reduce the refunds to be given to people who paid the tax.

"It grips my behind they are going to get the money after arguing against us for a solution the judge suggested we do," Jefferson County Commissioner Bobby Humphryes said. "That's my biggest grip about this."

The commission also voted not to tax the refunds. At one time, Commission President Bettye Fine Collins said the county could and should do that, but decided against that in Tuesday's agreement.

Copyright 2010 WBRC. All rights reserved.