Completely Compliance: Alabama Update

by DMA Staff | Mar 15, 2016
Completely Compliance Alabama
There have been many changes occurring in Alabama for the past three years and more to come in 2016. In 2012, Act 2012-279 mandated the Department of Revenue to provide a single point for taxpayers to electronically file state and local sales, use and rental tax. So in October 2013, the Department rolled out MAT (My Alabama Taxes) or ONE SPOT. While you still have to make separate payments to the non-state administered jurisdictions, you can file all in ONE SPOT. REFERENCE

In 2014, an adjusted Rule 810-6-5-.04.02 helped redefine the requirements of the seller to collect local jurisdiction taxes, specifically for out-of-state sellers. These requirements are more streamlined to the state tax requirements. REFERENCE

This year, more changes occurred regarding liability of sellers’ use tax. As mentioned in the previous newsletter, Legislative Act 2015-448 created the Simplified Sellers’ Use Tax. This tax provides a flat 8% sellers’ use tax rate with a 2% collection discount allowed. Sellers must be approved to participate in the program and can be removed from the program if the seller does not adhere to the rules of the program. REFERENCE

For the upcoming year, we will see more changes. First, Act 2015-503, HB 25 changes how purchased vehicles are handled when the resident is not titling in the state of Alabama. Effective January 1, 2016, out-of-state purchasers will no longer be exempt from the Alabama sales tax of 2% for motor vehicle sales. This includes trucks, trailers, semi-trailers and other vehicles categorized as such. If the purchaser’s home state in which the vehicle will be titled allows for Alabama residents to be exempt from automobile tax to that state, then the foreign purchaser will also be exempt from this Alabama tax as well.

SB 20 introduced a tax amnesty program schedule for 2016. The holiday must occur prior to August 2016 and include periods prior to January 1, 2015. Certain penalties will not be waived and motor fuel taxes will not apply. If approved, all penalties and half of the interest will be removed.

Per Act 2015-534, all persons or companies, other than governmental entities, having a statutory exemption from the payment of Alabama sales, use or lodgings tax must annually obtain a certificate of exemption, Form ST: EX-A1, effective January 1, 2016. A certificate of exemption must be presented to the seller for the sale to be exempt from tax. The application can be found here. Any questions regarding this exemption may be forwarded to Traci Sherlock. The reference materials for the Acts mentioned above as well as other state and local changes can be found here.

Finally, Act 2015-52 which allows lodgings tax to be filed through the ONE SPOT program has been delayed until October 1, 2016. REFERENCE

Please do not hesitate to contact your local DMA office should you have specific questions or requests.

Completely Compliance is a quarterly e-newsletter exclusively for clients and employees of DMA. It is intended to provide relevant sales/use tax news, events, and information. As such, this e-newsletter should be used for general informational purposes only, and not as a substitute for consultation with professional tax, legal, or other competent advisers. Before making any decision or taking any action based upon information contained in this e-newsletter, you should consult with a DMA professional.