Late last week, Sen. Vivian Davis Figures, D-Mobile, introduced legislation that would eliminate retailers’ sales tax collection allowance starting Sept. 1, 2020.
The Senate Finance and Taxation Education Committee will conduct a public hearing on SB241 at 10 a.m. Wednesday, March 11.
All states penalize businesses for late remittal of sales taxes. Alabama, along with the majority of other states, offers an allowance to retailers for collecting sales taxes on time.
Alabama’s allowance is 5 percent on the first $100 of sales taxes remitted on or before the 20th of each month, and 2 percent on sales taxes remitted beyond the first $100. A 2001 executive order capped the monthly allowances retailers get for collecting and remitting sales taxes on time at $400, no matter the number of locations a retailer operates.
The Alabama Retail Association will continue to guard the small allowance retailers get for collecting and remitting sales taxes to the state.
This article is part of the Alabama Retail Report, a communication for Alabama Retail Association members. Not a member? Join us!
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