Refinement of voluntary tax remittance from online-only sellers on way to House for final debate

Legislation that would alter the way the state collects taxes from out-of-state, online-only and other remote sellers could get its final vote soon in the House.

The Alabama Revenue Department requested change in the law received quick approval Wednesday, Feb. 22, from the House Ways and Means General Fund Committee. SB86 by Sen. Trip Pittman, R-Daphne, now goes to the full House for final consideration.The same committee approved the companion bill, HB83 by Rep. Rod Scott, D-Fairfield, on Wednesday, Feb. 15.

The bills amend The Simplified Seller Use Tax Remittance Act, which was enacted in 2015 and amended in 2016. That law has generated $15 million in new tax revenue so far this budget year and is expected to jump to $40 million by the end of the year, Revenue Commissioner Julie Magee says.

The bills would:

  • Allow the Revenue Department to make monthly, rather than quarterly distributions to local governments. “We have collected $3.9 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 has said 85 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.

If enacted, the changes would be effective July 1, 2017.

Learn more about The Simplified Seller Use Tax Remittance Act

 

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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