State refines voluntary tax remittance from online-only sellers

The state has made further refinements to the way it collects taxes from out-of-state, online-only and other remote sellers.

On March 22, 2017, the governor signed Act No. 2017-82 into law. Known as SB86 / HB83 during the session, the legislation was sponsored by Sen. Trip Pittman, R-Daphne, and Rep. Rod Scott, D-Fairfield.

The Alabama Revenue Department requested the latest changes to The Simplified Seller Use Tax Remittance Act, which was originally enacted in 2015, then amended in 2016. By March, the act had generated almost $20 million in new tax revenue in the current budget year and is expected to jump to $40 million by the end of the year, Revenue Commissioner Julie Magee says. In the 2016 fiscal year, the law brought in $4.3 million.

The newly enacted changes:

  • Allow the Revenue Department to make monthly, rather than quarterly distributions to local governments. Since the first of the year, “we have collected $6.3 million for local entities that can’t be distributed until April under the current law,” Mike Gamble, a deputy revenue commissioner, said.
  • Allow the department to disclose the names of remote sellers participating in the simplified seller program. Magee says 92 retailers are participating, but the only known participant is Amazon. Gamble said disclosure of those participating will let local governments know not to consider an audit of those companies as they are already remitting taxes.
  • Remove the requirement that a participant in the simplified seller program participate for at least six months before establishing a physical presence in the state. This will allow those planning to establish a distribution center or a store in the state to immediately begin to collect through the simplified sellers program, Gamble said. Those establishing Alabama distribution centers can continue to participate in the simplified sellers program as long as they don’t have a retail presence in the state, he said. Once the seller has a retail presence in the state, they are no longer eligible for the simplified seller program or its flat, 8 percent tax rate.

The above changes are effective July 1, 2017.

Learn more about The Simplified Seller Use Tax Remittance Act


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