Starting Aug. 1, tobacco, beer and wine wholesalers/distributors must report sales on which no taxes are collected. That requirement also includes wholesale or warehouse clubs that sell tobacco products under a membership. Gov. Kay Ivey signed the Wholesale to Retail Accountability Program, or WRAP, (Act No. 2017-294) into law Tuesday, May 16. The legislative sponsors were Rep. Ken Johnson, R-Moulton, and Sen. Clyde Chambliss, R-Prattville.
The legislation requires tobacco, beer and wine wholesalers/distributors to report to the Alabama Department of Revenue how much they sold and to what retailers or other resellers they sold it. Similar legislation last year also included some retailer/wholesalers in the reporting requirement. Alabama Retail worked with the Alabama Revenue Department to remove them from this year’s legislation. The law also sets up an industry advisory group to make recommendations on how the reports are to be filed. The Alabama Retail Association will have an appointee to that group.
The Senate sponsor and the Alabama Revenue Department said the impetus behind the new law is convenience stores that are not remitting all of the sales taxes due to the state.
Deputy Revenue Commissioner Mike Gamble said, “the greatest level of noncompliance is in convenience stores.” Gamble added that the most valuable goods in pinpointing sales tax abusers are beer, wine and tobacco.
The law also requires the state’s cities to electronically submit all municipal business privilege license applications and renewals to the state Revenue Department starting Oct. 1, 2019. Gamble said that provision will make it possible for the department to make sure local businesses are also licensed at the state level.
As a result of the new law, Gamble said that by Jan. 1, 2022, the Revenue Department will be the sole source for municipal and county governments to obtain sales information required under the WRAP program for auditing purposes.
This article is part of the Alabama Retail Report, a communication for Alabama Retail Association members. Not a member? Join us!