More than 100 cities and municipalities in Alabama reportedly stand to lose money due to the cessation of tax collection in police jurisdictions just outside their city limits.
In Alabama, more than a hundred municipalities may incur financial losses if they are forced to cease tax collection inside the boundaries of their respective police agencies.
A report has indicated that Alabama cities are at risk of losing their ability to levy and collect taxes and fees for police jurisdictions outside their municipal limits.
This is due to a law that took effect in 2021, which requires municipalities to provide the state with information on the tax revenue they have collected and how it has been spent.
Under the legislation, cities lacking information on taxes levied within their police jurisdictions could forfeit their tax collection rights, even if these areas fall within their corporate limits.
According to a local news outlet, there are currently 128 cities in Alabama that are affected by this law, but it remains unclear if more will be added.
The primary aim of this legislation is to prevent city officials from using tax money collected from areas outside their city limits. To comply with the law, municipalities were given a year to submit their population counts to the state.
However, some municipalities have reportedly opted not to file a report due to a perceived lack of revenue.
In addition to the risk of losing tax collection rights, the law also prohibits cities from ever collecting taxes and fees for police jurisdictions outside their municipal limits.
The extent of the financial impact on these cities and towns is still being determined, and it is unclear whether they will continue to patrol these areas even if they do not receive tax revenue.