On one side of a looming showdown in Montgomery are Alabama's hundreds of cities. On the other side is the state's influential and politically shrewd county commission association. At issue is a potential wellspring of new revenue: taxes levied on online retail transactions.

It's coming to a head with a bill in the Legislature styled SB130.

In essence, the proposed legislation is all about online giant Amazon. Here's the background: Soon, Amazon will finalize its acquisition of the high-profile grocer Whole Foods.

Right now, Amazon - with no brick-and-mortar presence in the state - doesn't have to collect regular sales taxes from its Alabama customers. Instead, it voluntarily collects the state's Simplified Sellers Use Tax (SSUT), a flat rate of 8 percent.

Whole Foods, with stores in some of Alabama's big metros, will give Amazon a brick-and-mortar presence.

But SB130 will open the way for Amazon to stay in the SSUT program, levying the 8 percent.

Cities fear that other giant retailers - namely Walmart, with its burgeoning online arm - will follow suit, jumping to the SSUT as best they can.

After all, a shopper ordering groceries online at Walmart, then picking them up a few hours later, will enjoy a tidy savings paying an 8 percent flat tax rather than a city's regular rate of 10 percent or more.

The head of the Association of County Commissions of Alabama, Sonny Brasfield, contends that cities are blowing things out of proportion. "It's a misunderstanding of what SSUT is and I really think a misunderstanding of how the whole digital retail world operates today," he said.

The debate could start to boil at the Statehouse on Thursday, before the Senate Finance and Taxation General Fund Committee. The committee is chaired by state Sen. Trip Pittman, R-Montrose, who is SB130's sponsor.

'Kind of hysteria'

The state introduced the SSUT program in 2015, trying to recoup taxes being lost as online shopping turned the retail world upside down.

Half of the revenues from the 8 percent go into state coffers, with the other half split between counties and cities based on population sizes.

There are about 166 online participants in the program, but Amazon is - by far - the largest contributor of the $60 million that SSUT generated in the most recent fiscal year.

In Mobile, brick-and-mortar retailers -- those with a physical presence -- assess a 10 percent combined sales tax rate. Of that, half of the revenue goes into the city's coffers.

The SSUT program has long been a sore spot with cities, who believe that they are being short-changed. Now, SB130 has them up in arms.

Under the current SSUT law, an online seller can no longer participate if it acquires an affiliate with a physical presence in Alabama. SB130 eliminates the affiliate restriction.

On Tuesday in Mobile, city officials labeled SB130 as a "money grab" that could cripple their city's finances and jeopardize crucial road and infrastructure projects.

As such, the City Council unanimously approved a resolution opposing the measure.

Brasfield believes Mobile and others are behaving with "a kind of hysteria."

He said that SB130 cannot apply to Walmart or any retailer with a physical presence in Alabama. He said that the legislation subjects online ordering of groceries -- which are picked up at stores like Walmart -- to local sales taxes, not the SSUT program.

He maintained that Amazon's purchase of Whole Foods does not "trigger" the rule against having a brick-and-mortar affiliate. He said that Whole Foods would have to serve as a venue to market Amazon's online retailing before anyone could attempt to prove that Amazon had a physical presence in Alabama.

Brasfield also believes that without SSUT, cities like Mobile and elsewhere would get nothing from online sales.

He said, "None to the things being discussed hold any water. The cities are not losing any money."

Mobile, said Brasfield, "has gotten $1.3 million for free from companies that we cannot make pay us."

'Disadvantage in the marketplace'

But mayors throughout Alabama aren't buying it, at least for now.

Explained Ken Smith, executive director with the Alabama League of Municipalities: "It's a difference between the 2 percent they get off the SSUT versus the amount of money they would collect off their local taxes."

Said George Talbot, spokesman with the city of Mobile: "We categorically disagree with Mr. Brasfield's assertions about the bill, which would have a devastating effect on cities across Alabama and the citizens they serve. At the very least, the bill raises serious questions that deserve answers before a vote is taken. Good legislation is the product of sunlight and healthy discussion - not rushed from the back rooms of Montgomery through the Legislature on a greased track."

Among the critics of SB130, and the SSUT program in general, are the two mayors running for governor this year -- Republican Huntsville Mayor Tommy Battle and Democrat Tuscaloosa Mayor Walt Maddox.

Battle, in a statement, said, "My primary concern is for our brick-and-mortar stores who would be collecting, in many cases, a higher sales tax. This puts them at a disadvantage in the marketplace. It isn't fair for these local businesses to be carrying the tax burden for companies that won't pay their fair share."

Maddox said he is concerned the state does not have a comprehensive strategy to address the digital economy and its impact on basic services for state and local governments. Without one, he said, the state is creating a system that collects sales and use taxes from out-of-state vendors at discounted rates.

"I believe the SSUT was well-intended, but the law of indirect consequences are compounding with the proliferation of online sales," said Maddox, who is a member of a digital task force with the League of Municipalities. "Providing a discounted tax rate in perpetuity for existing SSUT vendors, especially as megastores and online entities are acquiring traditional retailers located throughout our state, has the potential of eroding tax bases in nearly every county."

He continued, "For tens of thousands of small businesses in Alabama, showing preference to out-of-state corporations increases their challenges by orders of magnitude. Right now, the state is shooting in the dark as it relates to adjusting to the 21st century economy."

It's not only the mayors of large cities who have concerns. The cautions are coming from all over.

Hoover Mayor Frank Brocato said he sees nothing in the bill that brings benefit for his city.

"Like the previous legislation enabling the SSUT program, the state continues to get their 4 percent sales and use tax levy, but still at the expense of sales tax reliant cities like Hoover," Brocato said.

Schools could also come forward with concerns. In general, sales tax revenues are funneled into the state's Education Trust Fund. But SSUT diverts a much greater share of that revenue, or 75 percent, into the General Fund while only 25 percent goes directly for education.

If more flexibility is allowed for brick-and-mortar companies to join SSUT, school officials fear it could erode their bottom lines.

"If there are winners and losers in a tax bill, we need to be leary," said Craig Pouncey, superintendent of Jefferson County Schools. "Language in any bill can appear to do one thing but in reality it does something else."

Pittman, the bill's sponsor, said he's heard the concerns, and that they will get a proper airing. He is also waiting on a fiscal analysis to be performed on the bill before it moves forward in the legislative process.

His advice to city officials: "I'd observe it a little longer."

Pittman added, "I don't want the SSUT, which is important for the state, we don't want it to go away. There will be debate on the effects of this on governmental bodies."

This story was updated at 8:16 a.m. on Jan. 18, 2018, to include an extra statement from Sonny Brasfield that clarifies grocery orders online, which are picked up at a store, are subject to local sales taxes -- and not the SSUT program.