Jefferson County prepares occupational tax stop notice

JEFFERSON COUNTY, AL (WBRC) – The Jefferson County Commission will send notice to employers in the county to stop collecting the occupational tax.

Jeffco's Department of Revenue hopes to have the notices in the mail by Thursday to the 15,000 employers that pay the tax. The notices will order employers to stop withholding the tax and return the money to employees. They also state that the amount and time of refunds from previously collected occupational taxes will be decided by the Circuit Court of Jefferson County at a later date.

The tax was struck down as unconstitutional in December and that decision was upheld by the Alabama Supreme Court earlier this month. Jefferson County Commissioners now say they will be at a loss of $70 million for the year. Thousands of items have now been pulled off the commission's agenda and spending is being delayed in an attempt to save money for the county.

Jefferson County went through a similar situation when the previous occupational tax was struck down in January of 2009. Commissioners at the time avoided the possibility of bankruptcy and went through a strong financial crisis where many employees were placed on leave.

The current commission has hired a company to help advise commissioners in the county's turnaround. Commissioners say bankruptcy remains an option.

The notices sent to employers to end the tax collection will read:

NOTICE CONCERNING OCCUPATIONAL TAX WITHHOLDING AND REMITTANCES

Effective immediately, employers should stop withholding Jefferson County occupational taxes from their employees' paychecks.  Any amounts that have been withheld but not yet remitted to the County should NOT be sent to the County, but instead should be paid to the employees from whose paychecks the amounts were withheld.

The Supreme Court of Alabama has ruled invalid the statute under which the occupational tax was levied by the County, so the County will no longer levy and collect the occupational tax.  A decision on the amount and timing of refunds of occupational taxes that were previously levied and collected by the County under the invalidated statute will be made by the Circuit Court of Jefferson County at some later date.

The county hopes to get the notices out before another payroll deduction is made.

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