Alabama to ramp up online sales regulations

Business

MONTGOMERY, Ala. (WIAT) — Many took to their computers and phones Monday to try to score the best deals possible during Amazon Prime Day.

“It is becoming one of the biggest online shopping days, because of the promotion going into it,” Melissa Warnke said.

Lawmakers and retailers are paying close attention to online sales tax collection.

“Our entire sales tax base is based on people shopping and paying taxes that goes to support our public safety, parks and rec, education and infrastructure,” Warnke said.

Alabama, the first state to adopt an economic nexus policy, has been collecting online sales tax through a voluntary system, the Simplified Sellers Use Tax and Economic Nexus Rule since 2015.

The rule requires remote sellers with more than $250,000 in retail sales of tangible personal property into Alabama to collect sales or use tax on transactions with Alabama customers. It requires such retailers to register for the Alabama Simplified Sellers Use Tax Program (SSUT) and collect and remit sales/use tax to the state no later than Oct. 1, 2018. The rule allows remote sellers to utilize a simplified, flat 8% use tax program established by Alabama in 2015.

A year after the U.S. Supreme Court’s South Dakota vs. Wayfair Inc. decision, Alabama Revenue Department officials plan to develop long-term guidance through further rulemaking.

In the Wayfair case, the U.S. Supreme Court ruled that states can tax out-of-state businesses based on their economic activity in the state. Businesses no longer have to be physically present in a state to have tax liability.

“We’re really interested in making sure we preserve the state’s tax base, and the internet sale tax base is crucial for that,” said Rep. Rod Scott, D-Fairfield.

“Now the internet and the brick and mortars are more competitive because the internet is being taxed,” he added.

Alabama’s 14th annual sales tax holiday for school-related items begins at 12:01 a.m. Friday, July 19, 2019, and ends at midnight Sunday, July 21, 2019.

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