Alabama Top Court Revives Landlords’ Student Housing Tax Lawsuit

A group of out-of-state landlords convinced the Alabama Supreme Court to revive on Friday their lawsuit alleging Tuscaloosa’s higher tax rate on student housing is unconstitutional.

The city bumped up the 1% business license fee on rents to 3% for student-oriented housing developments with more than 200 bedrooms. The owners’ complaint sufficiently alleges that the tax violates their equal-protection, due-process, and dormant-commerce clause rights, Justice William B. Sellers wrote for the majority.

Tuscaloosa justified the higher rate for large student housing complexes by arguing their density and proximity to highly developed areas impose increased burdens on infrastructure and public services. ...