Act No. 2017-415 (SB316)
by Sen. Paul Sanford, R-Huntsville, and Rep. Paul Lee, R-Dothan
Act No. 2019-283 (HB329)
by Rep. Paul Lee, R-Dothan
The Alabama Retail Association supported the reforms included in Act No. 2017-415, which was signed into law Friday, May 26, 2017. The Alabama Legislature gave final approval to the legislation Friday, May 19, 2017. The Alabama Legislature amended the law in 2019 to make it clear that delivery licenses are issued per business, not for each delivery vehicle.
WHAT THE LAW DOES
- Exempts a business from buying a delivery license if the business delivers $10,000 or less in merchandise annually to a municipality where it has no store or other presence.
- Does not allow increases in the $100 delivery license fee. Previous law allowed cities to increase or decrease the license tax every five years.
- Limits issuance fees on delivery licenses to $10 or less.
- Limits penalties on the failure to purchase a delivery license to $10 or less.
- Gives a business 45 days, rather than the previous 10 days, to get a delivery license and pay the $10 penalty if it fails to get such a delivery license once it reaches the $10,000 annual threshold.
- Eliminates the current 1 percent per month interest rate on past due local taxes. Instead, the interest rate is the same as applies under general law. The interest rates that would apply can be found here.
- Effective Aug. 1, 2017.
Previously in Alabama, the costs associated with a delivery license could exceed the profit on the goods being delivered.
Delivery licenses are an outdated concept that no longer reflect current sales channels. Every day local retailers compete against out-of-state and online retailers that use third parties to deliver furniture, electronics, flowers and basic goods to towns throughout Alabama. Those remote retailers are NOT required to buy a delivery license, while local retailers that occasionally use their own trucks to deliver to nearby cities MUST buy a delivery license. Since 2014, Alabama retailers have been collecting and remitting sales taxes for those cities where they deliver in their own trucks.
In today’s marketplace, most retailers, from small to large, sell goods both in-store and online. When a retailer uses a common carrier for deliveries of online purchases, they aren’t required to have a delivery license. Common carriers include UPS, FedEx or USPS. Making hometown retailers pay a license fee that outside retailers don’t have to pay, puts them at an unfair advantage.
This law provides some relief for many of Alabama’s small retailers.
Pictured from left: Alabama Retail President Rick Brown, ARA Vice President Alison Hosp, Rep. Paul Lee, Gov. Kay Ivey, Sen. Paul Sanford, Alabama Retail Vice Chairman Jacob Shevin (Standard Furniture Co.) and Shane Spiller (Spiller Furniture & Mattress).