Occupational tax struck down

BIRMINGHAM, AL (WBRC) - BIRMINGHAM (WBRC) - A ruling from a Montgomery judge Wednesday has declared an occupational tax in Jefferson County unconstitutional, a ruling that the county commission says will lead to a financial crisis.

At the end of 2009, a lawsuit filed by Clayton Lowe on behalf of Jeffrey Weissman, a dentist in Jefferson County, asked a judge to prohibit the collection of an occupational tax. Judge Charles Price said that published notice of the bill passed in a 2009 special session of the legislature did not meet requirements in the state constitution.

That special session was called to address a budget crisis the county faced when another judge struck down the previous occupational tax. That first legal battle underwent appeals to the state supreme court and a decision that taxpayers should be refunded. The logistics of that taxpayer refund is still pending.

Wednesday's ruling leaves the county with the potential loss of a 0.45% tax on wages. The levy, passed by lawmakers, required professionals exempted in the previous tax to pay as well.

In the summer of 2008, the loss of the tax led to a financial crisis, according to newly elected Jefferson County Commission President David Carrington. He said that the new ruling will mean a $75 million loss for the county.

"The ruling could not come at a worse time for county employees," said Commissioner Jimmie Stephens, head of the Jefferson County finance committee. "We are taking steps to minimize the impact on employees."

The commission indicated that they will appeal the ruling, and are prepared to craft a new occupational tax for passage by the Alabama legislature. The commission may also ask Governor Bob Riley for a special session on the tax.

Judge Price indicated during the ruling that the plaintiffs are not entitled to a refund of the money collected so far.

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