Current Issues in Sales Tax
In this update, learn about the latest security features in MAT, issues affecting certain locals' use tax, 2015 legislation changes, simplified sellers use tax, and eligibility criteria for remote sellers in Alabama.
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Presentation Transcript
Current Issues in Sales Tax Alabama Department of Revenue
MAT Security MAT will be adding additional security features in the coming weeks. Here is what you need to know: When you log into MAT, you will be prompted to input an email address or phone number. For any future MAT sessions, you will then be prompted to send an Authentication Code to this email address or phone number. Along with your username and password, this code will be used to verify your identity when logging into MAT.
Current Issues Affecting Certain Locals Use tax higher than sales tax unconstitutional Impermissible discrimination against interstate commerce in violation of the Commerce Clause A.I.M., et al v. Lohman, 511 U.S. 641, 114 S.Ct. 1815, 128 L.Ed.2d 639 (1994) Challenge to Missouri s 1.5% use tax Missouri s local use tax varied widely In those locals were the use tax exceeded sales tax, Court held that the use tax improperly discriminated against interstate commerce 5 counties identified and are being notified (several cities as well) ADOR needs timely notification of tax rate levies and rate changes There are time constraints on updating the ADOR website and the ONE SPOT system. ADOR requires notice at least 30 days prior to the effective date of the change. All changes are effective on the first day of a month. Periodically review contact information provided to ADOR Review banking information and passwords on local government report accounts for ONE SPOT Photography rule September 9th
2015 Legislation County and Municipal Lodgings Tax added to One Spot -- Act # 2015-52 eff October 1, 2016 Uniform due date for local taxes eligible to be filed through One Spot Whether or not the payment is made through One Spot ADOR sending notices to locals Rate information Banking information Contacts Simplified Sellers Use Tax - Act # 2015-448 eff October 1, 2015
Simplified Sellers Use Tax Eligible seller collects, reports, and remits a flat 8 percent tax Regardless of where shipped to No additional sales or use tax due on transaction to any locality Two percent discount allowed Participation in the program is voluntary Seller must give invoice identifying the tax as simplified sellers use tax To be administered by ADOR through MAT Single return Single audit by State only
Eligible Seller Remote sellers with no physical presence in Alabama Must not have a legal requirement to collect and remit sellers use tax Purchasing law Physical presence Affiliate nexus Must apply, answer questionnaire, and be approved by ADOR to participate in the program
Distribution of Tax Proceeds of the SSUT paid shall be appropriated to the Department Department will retain the amount necessary to fund the administrative costs of implementing and operating the program Balance to be distributed 50 percent to the State Treasury Allocated 75 percent to the General Fund 25 percent to the Education Trust Fund Remaining 50 percent to be distributed to counties and cities: 25 percent to each county prorated by population 25 percent to each municipality prorated by population
Other Key Points Quarterly distribution of taxes to locals Will need banking information for ALL localities in order to distribute collections Distributions made electronically Any eligible seller who is accepted into the program may remain in the program if enrolled at least 6 months prior to either of the following events: National agreement such as MFA or other similar federal legislation is enacted, or U. S. Supreme Court decision overturns Quill
Eligible Seller Responsibilities Must complete the required application and questionnaire to certify that: Meets the definition of eligible seller Agrees to collect, report, and remit the simplified sellers use tax for all sales shipped or otherwise delivered into Alabama Agrees to provide the department with information related to sales to Alabama customers as required by law or requested by the department Agrees to comply with all program reporting requirements and remit the simplified sellers use tax.
