The Alabama Retail Association opposes federal legislation that calls for a delay in the implementation of the U.S. Supreme Court’s ruling in South Dakota vs. Wayfair Inc.
The high court’s June 21 decision overturned a requirement that retailers be “physically present” in a state to collect sales tax. The court recognized the South Dakota economic nexus standard of 200 transactions or $100,000 in sales as appropriate.
Alabama has had an economic nexus rule since 2016. Through Aug. 31 of this year, Alabama has collected more than $133.5 million in taxes through its Simplified Sellers Use Tax and economic nexus rule, according to Alabama Revenue Department records.
In the wake of the Supreme Court decision, the state has said it will begin strict enforcement of its rule starting Oct. 1. Our state requires sellers with more than $250,000 in retail sales of tangible personal property into Alabama to register with the department and begin collecting and remitting sales/use tax to the state no later than the Oct. 1 enforcement date.
Alabama is one of 31 states that now have or will soon have an economic nexus standard.
Two bills have been introduced in Congress to delay enforcement of those standards. H.R. 6824 by U.S. Rep. Jim Sensenbrenner, R-Wisc., and H.R. 6724 by U.S. Rep. Bob Gibbs, R-Ohio, seek to prevent states from imposing sales tax collections on remote retailers before Jan. 1 and would also bar retroactive taxation.
No states have attempted to collect taxes retroactively under the Wayfair decision.
The Alabama Retail Association is one of more than 50 state and national business associations that have signed onto a letter to the U.S. House leadership urging that body not to act on the proposed legislation.
“Congress should do nothing to impede the progress the court has made toward ending the unfair tax advantage out-of-state, online-only businesses had over local businesses,” said Alabama Retail President Rick Brown.
Both bills have been assigned to the U.S. House Judiciary Committee, which held a general hearing in July on the ramifications of the Supreme Court decision.
- U.S. Supreme Court creates level playing field for sales tax collection June 21, 2018, statement by Alabama Retail President Rick Brown
- Alabama’s Simplified Sellers Use Tax and Economic Nexus Rule Alabama Retail website page recapping developments in the Alabama law on this issue