Simplified Seller Use Tax Remittance Act.

Ala. Code tit. 40, ch. 23, art. 6, div. 3, pt. 2

in effect

Ala. Code § 40-23-191 Short Title; Definitions.

40-23-191. Short Title; Definitions. (a) This part shall be titled The Simplified Seller Use Tax Remittance Act. (b) For the purpose of this part, the following terms shall have the respective meanings ascribed to them in this section: (1) DEPARTMENT. The Alabama Department of Revenue. (2) ELIGIBLE SELLER. A seller that sells tangible personal property or a service, but does not have a physical presence in this state or is not otherwise required to collect and remit state and local sales or use tax for sales delivered into the state. The seller shall remain eligible for participation in the Simplified Use Tax Remittance Program unless the seller establishes a presence through a physical business address for the purpose of making in-state retail sales within the State of Alabama or becomes otherwise required to collect and remit sales or use tax pursuant to Section 40-23-190 through an affiliate making retail sales at a physical business address in Alabama. The term also includes a marketplace facilitator as defined in Section 40-23-199.2(a)(2) for all sales made through the marketplace facilitator’s marketplace by or on behalf of a marketplace seller. (3) LOCALITY. A county, municipality, or other local governmental taxing authority which levies a local sales and/or use tax. (4) SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or other legal entity. (5) SIMPLIFIED SELLERS USE TAX. The tax to be collected, reported, and remitted by eligible sellers who are participating in the program pursuant to requirements and procedures established pursuant to this part. (6) SIMPLIFIED USE TAX REMITTANCE PROGRAM or PROGRAM. The program established in this part to provide a mechanism for eligible sellers to collect, report, and remit the simplified sellers use tax established pursuant to this part. (7) STATE. The State of Alabama. (Act 2015-448, p. 1443, §1; Act 2016-110, §1; Act 2017-82, §2; Act 2018-539, §1.)

Ala. Code § 40-23-192 Simplified Sellers Use Tax Remittance Program.

40-23-192. Simplified Sellers Use Tax Remittance Program. (a) There is hereby established The Simplified Sellers Use Tax Remittance Program designed to allow an eligible seller who participates in the program to collect, report, and remit the simplified sellers use tax authorized herein in lieu of the sales or use taxes otherwise due by or on behalf of Alabama customers who have purchased items from the eligible seller that were shipped or otherwise delivered into Alabama by the eligible seller. Participation in the program shall be by election of the eligible seller and only those eligible sellers accepted into the program as set out herein shall collect and remit the simplified sellers use tax. Participation in the program shall not be construed as subjecting an eligible seller to franchise, income, occupation, or any other type of taxes or licensing requirements levied or imposed by the state of Alabama or any locality. (b) The program shall be administered by the department, which pursuant to this part, shall develop and make available to the eligible seller an easily accessible, online system in which to collect, report, and remit the simplified sellers use tax. Participants in the program shall be required to collect, report, and remit the simplified sellers use tax for all sales delivered into the state as long as remaining a participant in the program. Eligible sellers may continue in the program as long as they comply with all provisions of this part and procedures adopted by the department for participation in the program. (c) In order to participate in the program, an eligible seller shall make application with the department on a form designed by the department for that purpose. The application shall require, at a minimum, that the eligible seller: (1) Certifies that he or she is an eligible seller as defined herein. (2) Agrees to collect, report, and remit the simplified sellers use tax for all sales delivered into the state as long as he or she remains a participant in the program. (3) Agrees to provide the department with information related to sales to Alabama customers as required by this part or requested by the department. (4) Agrees to comply with all program reporting requirements established under program procedures. Any applicant who falsely certifies on his or her application that he or she is an eligible seller with the State of Alabama shall be subject to the negligence and/or fraud penalties under procedures found in Section 40-2A-11. (d) The department shall review all applications for participation, and where an applicant is determined to satisfy requirements to participate in the program, shall establish a simplified sellers use tax account for the eligible seller which will allow the eligible seller to report and remit all simplified sellers use tax collected pursuant to this part. (e) A participating eligible seller shall be removed from the program if: (1) He or she substantially fails to collect, report, and remit simplified sellers use taxes. (2) He or she fails to submit required reports on a timely basis. (3) Upon a determination that the seller is no longer an eligible seller, as defined by this part. (4) There is any other finding by the department that the participant is not in compliance with the terms authorizing participation in the program. Any participant who fails to report that he or she is no longer eligible for participation in the program or falsely certifies on any report that he or she is eligible shall be subject to the negligence and/or fraud penalties under procedures found in Section 40-2A-11. Removal from the program or assessment of the fraud or negligence penalty shall be subject to appeal rights and procedures established in this title. (Act 2015-448, §1.)

Ala. Code § 40-23-193 Collection and Remittance of Simplified Sellers Use Tax; Reporting; Statement.

40-23-193. Collection and Remittance of Simplified Sellers Use Tax; Reporting; Statement. (a) The simplified sellers use tax due under the program is eight percent of the sales price on any tangible personal property sold or delivered into Alabama by an eligible seller participating in the program. The collection and remittance of simplified sellers use tax relieves the eligible seller and the purchaser from any additional state or local sales and use taxes on the transaction. (b) The simplified sellers use tax collected by the eligible seller, at the rate of eight percent, shall be electronically reported in the manner prescribed by the department on or before the 20th day of the month next succeeding the month in which the tax accrues. The eligible seller shall remit the tax at the required rate or the amount of the tax collected, whichever is greater. The required monthly reporting from the eligible seller shall only include statewide totals of the simplified sellers use taxes collected and remitted, and shall not require information related to the location of purchasers or amount of sales into a specific locality. The department may not require an eligible seller to report and remit the simplified sellers use tax more frequently than is required for other sellers. (c) No eligible seller shall be required to collect the tax at a rate greater than eight percent, regardless of the combined actual tax rates that may otherwise be applicable. Additionally, no sales for which the simplified sellers use tax is collected shall be subject to any additional sales or use tax from any locality levying a sales or use tax with respect to the purchase or use of the property, regardless of the actual tax rate that might have otherwise been applicable. (d) The participating eligible seller shall collect the tax on all purchases delivered into Alabama unless the purchaser furnishes the eligible seller with a valid exemption certificate, sales tax license, or direct pay permit issued by the department. The eligible seller shall retain all exemption certificates, sales tax licenses, or direct pay permits in its files, or in such other manner as directed by the department. (e) The eligible seller shall provide the purchaser with a statement or invoice showing that the simplified sellers use tax was collected and is to be remitted on the purchaser’s behalf. The statement shall be in a manner prescribed by the department. (f) The simplified sellers use tax levied under this section shall not be collected and remitted in lieu of the sales and use tax collected by a licensing official pursuant to Section 40-23-104. (Act 2015-448, p. 1443, §1; Act 2017-82, §2; Act 2019-382, §2.)

Ala. Code § 40-23-194 Discount.

40-23-194. Discount. Eligible sellers may deduct and retain a discount equal to two percent of the simplified sellers use tax properly collected and then remitted to the department in a timely manner, provided that for tax periods beginning on or after January 1, 2019, the allowance for discount shall not apply to any taxes collected and then remitted which are in excess of four hundred thousand dollars ($400,000). The department is authorized to prescribe rules for administering the discount. No discount shall be allowed for any taxes which are not timely reported and remitted to the department pursuant to program procedures. (Act 2015-448, p. 1443, §1; Act 2018-539, §1.)

Ala. Code § 40-23-195 Rulemaking Authority; Recordkeeping.

40-23-195. Rulemaking Authority; Recordkeeping. (a) The department may adopt, promulgate, and enforce reasonable rules and regulations related to the implementation, administration, and participation in the program. The department shall have exclusive responsibility for reviewing and accepting applications for participation and for the administration, return processing, and review of the eligibility of sellers participating in the program. Eligible sellers participating in the program shall not be subject to audit or review by any Alabama locality. Eligible sellers shall maintain records of all sales delivered into Alabama, including copies of invoices showing the purchaser, address, purchase amount, and simplified sellers use tax collected. Such records shall be made available for review and inspection upon request by the department. (b) The department may disclose the name of eligible sellers, the effective date the eligible seller began participating in the program and, if applicable, the cease date the eligible seller ceased to participate in the program. (Act 2015-448, p. 1443, §1; Act 2017-82, §2.)

Ala. Code § 40-23-196 Refund or Credit of Excess Taxes Paid.

40-23-196. Refund or Credit of Excess Taxes Paid. (a) Any taxpayer who pays a simplified sellers use tax through this program that is higher than the actual state and local sales or use tax levied in the locality where the sale was delivered may file for a refund or credit of the excess amount paid to the eligible seller participating in the program. A business taxpayer who has a registered consumer use tax account with the department may claim credit for the overpayment of simplified use tax on their consumer use tax return in a manner prescribed by the department. All other taxpayers may file a petition for refund in the manner prescribed by the department. The petition for refund may only be filed once per year. In the event the amount due to be refunded in a year is less than twenty-five ($25.00) dollars, payment of the refund may be deferred by the department and combined with amounts due to be paid pursuant to subsequent annual refund petitions for a period of up to three years. (b) Any taxpayer seeking a refund or credit of excess taxes paid to an eligible seller participating in the program shall maintain records documenting the amount of simplified sellers use tax paid. Refund or credit requests shall require proper documentation of amounts paid by the taxpayer and shall be submitted to the department with the petition for refund. (c) Notwithstanding any other provision of law, interest due on any refund of taxes paid directly to the department under this division shall be paid beginning 90 days after the receipt date of the properly documented refund petition with interest accruing beginning on the 91st day. (Act 2015-448, §1.)

Ala. Code § 40-23-197 Disposition of Funds.

40-23-197. Disposition of Funds. (a) The proceeds of simplified sellers use tax paid pursuant to this part shall be appropriated to the department, which shall retain the amount necessary to fund the administrative costs of implementing and operating the program and to cover the amounts paid for refunds authorized in Section 40-23-196. The balance of the amounts collected shall be distributed as follows: (1) Fifty percent to the State Treasury and allocated 75 percent to the General Fund and 25 percent to the Education Trust Fund. (2) Twenty-five percent to each county in the state on a prorated basis according to population as determined in the most recent federal census prior to the distribution. (3) Twenty-five percent of funds to be distributed to each municipality in the state on a prorated basis according to population as determined in the most recent federal census prior to the distribution. (b) Effective for tax periods beginning on or after January 1, 2019, the net proceeds after the distribution provided in subdivision (1) of subsection (a) shall be distributed 60 percent to each municipality in the state on a basis of the ratio of the population of each municipality to the total population of all municipalities in the state as determined in the most recent federal census prior to distribution and 40 percent to each county in the state, and deposited into the general fund of the respective county commission, on a basis of the ratio of the population of each county to the total population of all counties in the state as determined in the most recent federal census prior to the distribution. (c) The distribution of the proceeds from the simplified sellers use tax paid to counties and municipalities shall occur quarterly in a manner prescribed by the department. (Act 2015-448, p. 1443, §1; Act 2018-539, §1.)

Ala. Code § 40-23-197.1 Distributions of Simplified Sellers Use Tax Proceeds.

40-23-197.1. Distributions of Simplified Sellers Use Tax Proceeds. Notwithstanding the provisions of Section 40-23-197, the department may initiate monthly distributions of the proceeds from the simplified sellers use tax paid to counties and municipalities. (Act 2017-82, §1.)

Ala. Code § 40-23-198 Applicability of Part 2.

40-23-198. Applicability of Part 2. In the event that the enactment of federal legislation removes current federal limitations on states’ ability to enforce their sales and use tax jurisdiction against businesses that lack an instate physical presence, the provisions of this part shall be inapplicable as to any eligible seller who is not registered with the department as a participant in the program at least six months prior to the date of such change in law. In such event, the provisions of this part will continue to apply to any eligible seller who has been approved by the department as a participant in the program at least six months prior to the change in law and to any taxpayer who has paid or pays the simplified sellers use tax authorized under this part provided the eligible seller continues to collect, report, and remit the simplified sellers use tax and otherwise complies with all procedures and requirements of the program. Eligible sellers participating in the program pursuant to this subsection may continue to receive a discount of two percent (2%) on all simplified sellers use taxes properly remitted under the provisions of this part and shall continue to report sales under the conditions set out in Section 40-23-193. (Act 2015-448, §1; Act 2016-110, §1.)

Ala. Code § 40-23-199 Amnesty for Certain Uncollected Remote Use Tax.

40-23-199. Amnesty for Certain Uncollected Remote Use Tax. (a) Subject to the limitations set out in this section, an eligible seller participating in the program shall be granted amnesty for any uncollected remote use tax that may have been due on sales made to purchasers in the state for all periods preceding October 1, 2019. (1) The amnesty precludes assessment for uncollected simplified sellers use tax together with any penalty or interest for sales made during a period prior to October 1, 2019. (2) The amnesty provided in this section shall be granted to any eligible seller who applies to participate in the program following acceptance into the program by the department. (3) Amnesty is not available to an eligible seller with respect to any matter or matters for which the eligible seller has received notice of the commencement of an audit and the audit is not yet finally resolved, including any related administrative and judicial processes. (4) Amnesty is not available for any simplified sellers use tax already paid or remitted to the state or for taxes collected by the eligible seller. (5) Amnesty is fully effective, absent the eligible seller’s fraud or intentional misrepresentation of a material fact, as long as the eligible seller continues his or her participation in the program and continues to collect, report, and remit applicable simplified sellers use tax for a period of at least 36 months. (6) Amnesty is applicable only to simplified sellers use tax due from an eligible seller in his or her capacity as an eligible seller and not to remote use taxes due from a seller in his or her capacity as a buyer. (b) No class action may be brought against an eligible seller in any court of this state on behalf of customers for an overpayment of simplified sellers use tax collected and remitted on sales made by the eligible seller. (Act 2015-448, p. 1443, §1; Act 2019-382, §1.)

Ala. Code § 40-23-199.1 Amnesty for Certain Uncollected Remote Use Tax.

40-23-199.1. Amnesty for Certain Uncollected Remote Use Tax. The Simplified Sellers Use Tax Remittance Program may not be used to report sales tax obligations subject to the sales tax imposed by Chapter 23 of this title or any local law or municipal ordinance or any county ordinance enacted pursuant to Section 40-12-4 imposing a sales tax for those sales of tangible personal property which are sold at a retail location in this state. (Act 2018-539, §2.)

Ala. Code § 40-23-199.2 Marketplace Facilitators.

40-23-199.2. Marketplace Facilitators. (a) For the purpose of Act 2018-539, the following terms shall have the respective meanings ascribed to them: (1) DEPARTMENT. The Alabama Department of Revenue. (2) MARKETPLACE FACILITATOR. A person that contracts with marketplace sellers to facilitate for a consideration, regardless of whether deducted as fees from the transaction, the sale of the marketplace seller’s products through a physical or electronic marketplace operated by a person, and engages: a. Either directly or indirectly, through one or more affiliated persons in any of the following: 1. Transmitting or otherwise communicating the offer or acceptance between the purchaser and marketplace seller; 2. Owning or operating the infrastructure, electronic or physical, or technology that brings purchasers and marketplace sellers together; 3. Providing a virtual currency that purchasers are allowed or required to use to purchase products from the marketplace seller; or 4. Software development or research and development activities related to any of the activities described in paragraph b. if such activities are directly related to a physical or electronic marketplace operated by a person or an affiliated person, and b. In any of the following activities with respect to the marketplace seller’s products: 1. Payment processing services; 2. Fulfillment or storage services; 3. Listing products for sale; 4. Setting prices; 5. Branding sales as those of the marketplace facilitator; 6. Order taking; 7. Advertising or promotion; or 8. Providing customer service or accepting or assisting with returns or exchanges. (3) MARKETPLACE SELLER. A seller that is not a related party, as prescribed in Section 40-23-190(c), to a marketplace facilitator and that makes sales through any physical or electronic marketplaces operated by a marketplace facilitator. (4) PERSON. As defined in Section 40-23-1 (a)(1). (5) PURCHASER. A person who purchases or contracts to purchase tangible personal property as defined in Section 40-12-220. (6) QUALIFYING AMOUNT. Two hundred and fifty thousand dollars ($250,000) or an amount as otherwise prescribed by the department. (7) RETAIL SALE. As defined in Section 40-23-1(a)(10), other than sales of motor vehicles as defined in Section 40-12-240. (8) SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or other legal entity. (9) SIMPLIFIED SELLERS USE TAX. The tax as levied under Section 40-23-193. (10) STATE. The State of Alabama. (b) By no later than January 1, 2019, marketplace facilitators must either register with the department to collect and remit simplified sellers use tax on retail sales made through the marketplace facilitator’s marketplace by or on behalf of a marketplace seller that are delivered in Alabama, whether by the marketplace facilitator or another person, or report such retail sales and provide customer notifications pursuant to subsection (m). This subsection shall apply to any marketplace facilitator that has more than the qualifying amount in retail sales in Alabama for the preceding 12 months. Such retail sales shall include those made directly by the marketplace facilitator and shall also include those retail sales made by marketplace sellers through the marketplace facilitator’s marketplace. The collection and reporting requirements of this subsection shall not apply to retail sales other than those made through a marketplace facilitator’s marketplace. (c) Marketplace facilitators that collect simplified sellers use tax under this section shall report and remit the tax in accordance with the provisions of Section 40-23-193 and shall maintain records of all sales delivered to a location in Alabama, including copies of invoices showing the purchaser, address, purchase amount, and simplified sellers use tax collected. Such records shall be made available for review and inspection upon request by the department. (d) Marketplace facilitators who properly collect and then remit to the department in a timely manner simplified sellers use tax on sales in accordance with the provisions of this section by or on behalf of marketplace sellers shall be eligible for the discount provided under Section 40-23-194. (e) The collection and remittance of simplified sellers use tax relieves the marketplace facilitator, the marketplace seller, and the purchaser from any additional state or local sales and use taxes on the transactions for which simplified sellers use tax was collected and remitted. (f) Marketplace facilitators that collect simplified sellers use tax shall not be subject to audit or review by any Alabama locality for simplified sellers use tax. Sales by marketplace sellers for which simplified sellers use tax has been collected shall not be subject to audit or review by an Alabama locality for simplified sellers use tax. This exclusion shall not preclude an Alabama locality from auditing or reviewing any other sales by a marketplace seller for which sales or use tax would be due. (g) Marketplace sellers for whom marketplace facilitators collect and remit simplified sellers use tax in accordance with the provisions of this section on all sales made by or on behalf of the marketplace seller that are delivered in Alabama shall be granted the continued participation and amnesty protections provided for eligible sellers under Sections 40-23-198 and 40-23-199. (h) The marketplace facilitator shall provide the purchaser with a statement or invoice showing that the simplified sellers use tax was collected and shall be remitted on the purchaser’s behalf. The statement shall be in a manner prescribed by the department. (i) No class action may be brought against a marketplace facilitator in any court of this state on behalf of customers for an overpayment of simplified sellers use tax collected and remitted on sales facilitated by the marketplace facilitator. (j) Any taxpayer who remits simplified sellers use tax pursuant to this section shall be entitled to refunds or credits to the same extent and in the same manner provided for in Section 40-23-196 for taxes collected and remitted through the Simplified Sellers Use Tax Remittance Program. (k) Marketplace facilitators shall be subject to the penalty provisions and procedures of Section 40-2A-11 and reporting requirements of Section 40-2-11(7)(b). (l) The distribution of simplified sellers use tax remitted by marketplace facilitators shall be made in accordance with Sections 40-23-197 and 40-23-197.1. (m) Effective January 1, 2019, any marketplace facilitator who does not collect and remit sales, use, or simplified sellers use tax on Alabama retail sale transactions of qualifying amounts shall be required to report such retail sales and provide customer notifications, within constitutional limitations, pursuant to Section 40-2-11(7)(b) and rules promulgated thereunder. (n) The department may adopt, promulgate, and enforce reasonable rules and regulations for the administration and enforcement of Act 2018-539. (Act 2018-539, §3.)

Ala. Code § 40-23-199.3 Online Application Process.

40-23-199.3. Online Application Process. By no later than January 1, 2019, the department shall initiate an online application process to simplify refunds requested pursuant to Section 40-23-196. (Act 2018-539, §4.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026