In the second year of the legislative term, the Alabama Legislature introduced and enacted more bills than it did in its record-breaking first year in office. During the regular session that ended May 16, 2012, and the special session that ended May 21, 2012, the Legislature enacted major items on the Alabama Retail 2012 Legislative Agenda along with many other bills that Alabama Retail supported or monitored. Alabama Retail advocates for legislation that benefits your business, while protecting retailers from potentially damaging legislation.
SINGLE PORTAL FOR SALES/USE/LEASE TAXES
AND NEW REMOTE USE TAX LAWS MAKE E-FAIRNESS STRIDES
By Sept. 30, 2013, Alabama will have ONE SPOT, an electronic tax-filing system that gives retailers statewide the option to handle three taxes levied by three different types of governments with one return and one payment in one place. The Optional Network Election for Single Point Online Transactions will offer streamlined tax filing for city, county and state sales, use and lease/rental taxes into one electronic portal. Alabama Retail board member Doug Markham, executive vice president and chief administrative officer for Books-A-Million Inc., will serve as the ARA representative on the state and local advisory committee that advises the Alabama Department of Revenue on the operation of the new system. It is a first step toward bringing Alabama’s tax system into compliance with federal legislation pending in Congress that would require all retailers to collect sales and use taxes. ONE SPOT coupled with public support for e-fairness by Alabama Gov. Robert Bentley accomplished ARA’s goal of encouraging Congress to enact a federal e-fairness solution.
In another vote of confidence for all retailers collecting sales taxes, the Alabama Legislature decided in a special session right after the regular session to shift remote state use tax proceeds from the state’s education to its general operating fund. Beginning Oct. 1 of this year, any Alabama use taxes collected by remote sellers as sales taxes would go to the state’s General Fund. For the state to realize this much needed growth revenue source, however, Congress would have to enact the Marketplace Fairness or Equity acts. Under the new state law, once Congress acts, 75 percent of any sales or use tax collected because of purchases Alabama residents make over the Internet, phone or by mail order will go to the state’s General Fund. The remaining 25 percent of remote use (sales) taxes will help fund state education. ARA will continue to support legislation that seeks level sales/use tax collection and remittal requirements for all retailers.
GROSS INCOME TAX FIX IS LAW
The state’s estimated 3,000 pass-through entities, such as partnerships, limited partnerships, limited liability corporations and S corporations that operate in multiple states, now have greater certainty about how to apportion income earned. In another achieved ARA 2012 legislative agenda item, the Alabama Legislature fixed a business-recognized inequity in the tax code and made gross income taxes fairer for business. The new law also allows a 50 percent tax credit for income generated in foreign countries.
ALABAMA HAS SECOND SALES TAX HOLIDAY
Alabama’s first severe weather preparedness sales tax holiday was July 6-8. Beginning in 2013 and every year thereafter, the annual severe weather sales tax holiday will be the last full weekend of February (Feb. 22-24 in 2013). Alabama shoppers can stock up tax free on common supplies costing less than $60 that every home and business needs to prepare for a natural disaster or emergency. Generators costing $1,000 or less also can be purchased free of the state’s four-percent sales tax during the three-day tax holiday. ARA also championed the state’s back-to-school sales tax holiday, which is held the first weekend of August. For more information on alabama’s sales tax holidays, go to: alabamaretail.org/alabamasalestaxholiday/
UNEMPLOYMENT COMPENSATION FRAUD LESS LIKELY
Those cheating the unemployment compensation payment system now must repay the state for their ill-gotten gains and be disqualified from receiving unemployment benefits for a certain period of time. As of Aug. 1, the unpaid waiting period for unemployment compensation also moved from the 14th to the first week of benefits. Both new laws should reduce unemployment compensation fraud, a long-supported tenet in ARA’s legislative agenda.
FOOD-MADE-ME-FAT NO LONGER ACTIONABLE
Retailers and restaurants are now protected from being sued by someone claiming food bought from retailers or eaten in restaurants made them obese thanks to Alabama’s Common Sense Consumption Act. Twenty-four other states have passed similar legislation.
COLD/ALLERGY MEDS ONLY AVAILABLE AT PHARMACIES
As of Aug. 1, certain medications used to combat cold and allergy symptoms can be sold only from behind a pharmacy counter to help combat illegal use of the products for methamphetamine. ARA supported this new law to ensure those medications remain available and affordable for the patients who need them.
NEW PHARMACY SERVICES PERMIT SAVES JOBS
A new pharmacy services permit now exists for call centers. The new law already has saved hundreds of jobs at the Walgreens Customer Care Center in Muscle Shoals (See Page 14, Vol. 12 No. 2 Alabama Retail Quarterly). Troy Mills, Walgreens divisional vice president for customer care, told reporters his company was impressed with the bipartisan effort to pass the legislation. The new permit applies to any such pharmacy support facility that doesn’t dispense or keep drugs.
STATE NOW REGULATES CREDIT SECURITY FREEZES
As of Aug. 1, a credit reporting agency is prohibited from releasing a frozen credit report or score to a third party without the explicit consent of the consumer. The new law sets up methods by which a consumer can have the freeze lifted in under 15 minutes, should he/she wish to apply for credit.
RETAILERS GET 4% ALLOWANCE ON E-911 FEES
On Sept. 1, retailers, rather than carriers, began collecting E-911 fees for prepaid wireless communications services at the point of sale. Thanks to ARA, retailers can deduct and retain four percent of the prepaid wireless 911 charges collected from consumers to cover expenses for collecting and remitting the fees. For more details, see Page 7 of Vol. 12 No. 2 Alabama Retail Quarterly and go to the Alabama Department of Revenue’s FAQs.
CHILD LABOR LAW MODIFICATIONS IN EFFECT
The Alabama Legislature made several updates and clarifications to the state’s child labor laws (See Page 7, Vol. 12 No. 2 Alabama Retail Quarterly) that went into effect Aug. 1. The changes deal with time records, age of warehouse workers, documents needed to verify age, where to display your child labor certificate and penalties. However, none of the changes affect your current child labor law poster. It remains valid.
OTHER NEW LAWS AND EFFECTIVE DATE
As of Aug. 1:
• Prescribed diabetic supplies are exempt from state and local sales and use tax taxes. Specifically tax exempt are insulin and insulin syringes, any equipment, supplies, devices, chemical reagents and any related items used by a diabetic to treat diabetes or to test or monitor blood or urine. Insulin was already exempt from state and local sales and use taxes.
• The maximum size of a bottle or can of beer that can be sold by retailers in Alabama went from 16 ounces to 25.4 ounces. This law allows the sale of more types of gourmet or high-end specialty beers, which typically come in 22-ounce or 750-milliliter bottles.
• There is a statewide ban on tampering with the coding on beverages that tracks where and when a beverage was manufactured. The new law bans obscuring, removing or otherwise rendering illegible any product information on non-alcoholic beverage labels.
CLEARER IMMIGRATION LAW ON BOOKS
Needed revisions to Alabama’s stringent immigration law made during the regular session give businesses some relief from the law’s administrative burdens. For more details, see story on Page 7 of the Vol. 12 No. 2 Alabama Retail Quarterly. E-Verify requirements of the law remain in place in Alabama. Eighteen other states also now utitlize E-Verify.
NO LAWS ENACTED THAT WOULD
TAX OR ‘FEE’ YOU OUT OF BUSINESS
Alabama Retail again successfully opposed required unitary combined reporting for corporate income taxes, which would have been detrimental to Alabama’s ability to attract new businesses and keep the ones it has. Bills that would have doubled filing fees for alcoholic beverage licenses and created first-time filing and licensing fees for retailers selling tobacco never even got a floor vote.
LEGISLATION THAT WILL REAPPEAR
TAXPAYER BILL OF RIGHTS II TO RESURFACE
The big disappointment for the 2012 session came with the governor’s decision to pocket veto landmark legislation to centralize Alabama’s tax appeal process and separate it from the taxing governments. Softening that blow was the governor’s pledge to include a simplified Taxpayer Bill of Rights II in the call of any special session before the end of the year or at the top of the legislative calendar in the 2013 regular session.