On December 23, 2009, Judge David Rains entered an Order confirming that Jefferson County owes the taxpayers $ 50,262,456.83 for amounts collected under the County’s prior occupational tax. Judge Rains held that the taxpayers had a vested right in this refund and that the subsequent enactment of the new occupational tax did not take that right away. This refund covers taxpayers whose payments of the occupational tax and business license fee were collected by the County after January 12, 2009 and before August 14, 2009.
This Order comes almost one year after Judge Rains declared the occupational tax invalid. His Order of January 12, 2009, was affirmed by the Alabama Supreme Court on August 25, 2009. Since that ruling, the County has continued to vehemently oppose the payment of refunds to the taxpayers. Most recently, the County filed a motion seeking to set aside the escrow order under the auspices of the new occupational tax. The County took the position that the new tax mooted the relief ordered by Judge Rains – despite the Alabama Supreme Court having asked the parties to brief the issue of whether the new tax mooted the case BEFORE hearing oral arguments and entering the August 25, 2009 opinion affirming Judge Rains. After making a thorough analysis of the arguments presented, Judge Rains denied the County’s motion.
In an effort to move the refund process forward, the Court appointed Edgar C. Gentle, III, as a special master to oversee the refund. A settlement fund has been established and the County has transferred $37,796,302.06 to that fund. According to Judge Rains’ Order of December 23, 2009, an additional $12,466,154.77 is due to be transferred, comprised of both principal ($10,016,325.89) and interest owed ($2,449,828.88). Mr. Gentle is in the process of collecting the information necessary from employers in Jefferson County to identify those who are entitled to receive a refund.
As much as we wish we could say this is the final chapter in the occupational tax fight and that refunds will be forthcoming quickly, the County has informed the Court that it intends to appeal these rulings to the Alabama Supreme Court. We are hopeful that the Supreme Court will dispose of these matters as quickly as possible so that the taxpayers of Jefferson County can receive their refunds. Going forward, the Court’s judgment will be earning interest at the rate of $478,126.28 per month until the matter is resolved and the taxpayer refunds can be processed.
