Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-6-5 - USE TAX LAW; CONTRACTORS GROSS RECEIPTS TAX; LODGINGS TAX; RENTAL TAX; UTILITY TAXES; MISCELLANEOUS RULES › Section 810-6-5-.04.02 - Seller's Responsibility To Collect County And Municipal Sales And Use Taxes

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Scope. The provisions of this rule are limited to describing a business's
			 obligation to collect and remit a local jurisdiction's sales or use tax,
			 whether or not that business has a physical location in the state. The
			 provisions of this rule have no bearing on a business's other local tax or fee
			 obligations including specifically a local jurisdiction's business license tax.
			 An obligation to collect and remit a local jurisdiction's sales or use tax
			 under the provisions of this rule does not obligate the business to file a
			 return for or pay any other local tax or fee. Likewise, this rule does not
			 address sourcing issues associated with the determination of where tax is due
			 or in which local jurisdiction tax is due. Sourcing issues are controlled by
			 the passage of title from seller to customer and are not addressed herein. The
			 provisions of this rule do not apply to the sale of automobiles, motorcycles,
			 trucks, truck trailers or semitrailers in transactions governed by Section
			 40-23-2(4) or
			 40-23-102,
Code of Ala. 1975
, and Rule
			 810-6-3-.42.02.
			 (Nonresidents, Sales to),
			 810-6-3-.42.03.
			 (Sales of Certain Automotive Vehicles to Nonresidents for First Use and
			 Registration or Titling Outside Alabama), or
			 810-6-3-.03.02.
			 (Automotive Vehicles, Certificate of Exemption/Out-Of-State Delivery
			 Form).
(2) Under the provisions of
			 Sections
			 11-51-200 and
			 11-51-202,
Code of Ala. 1975
, as amended, the governing body of
			 any municipality in the state may provide by ordinance for the levy of
			 municipal sales and use taxes, parallel to the state levy of sales and use
			 taxes. Under the provisions of Sections
			 11-3-11.2 and
			 40-12-4,
Code of Ala. 1975
, as amended, or any general, special
			 or local enabling act of the Legislature, the governing body of any county in
			 the state may provide for the levy of county sales and use taxes, parallel to
			 the state levy of sales and use tax except in limited instances where a
			 contrary local sales and use tax act was in effect on February 25, 1997. As
			 used in this rule, the term "local jurisdiction" means a municipality, special
			 tax district, police jurisdiction or county in Alabama.
(3) The threshold applicable for determining
			 whether a seller is obligated to collect and remit the state sales or use tax
			 associated with interstate transactions shall also be applied by sellers to
			 determine whether the seller is obligated to collect and remit local sales or
			 use tax by examining the contacts the seller has within each local jurisdiction
			 where local sales or use tax is due. Except as described in the following
			 paragraphs, any seller responsible for collecting and remitting state sales or
			 use tax with respect to a particular retail sales transaction or taxable use
			 must collect and remit the corresponding sales or use tax for the appropriate
			 local jurisdiction(s) with respect to the transaction or use. A seller may only
			 avoid the responsibility for collecting and remitting a local jurisdiction's
			 sales or use tax when the seller lacks physical presence within the local
			 jurisdiction that would be sufficient to create an obligation to collect and
			 remit state sales or use tax if the sales transaction or use in question was an
			 interstate transaction.
(4) For
			 purposes of determining whether the seller lacks sufficient physical presence
			 within the local jurisdiction to create an obligation to collect and remit the
			 local jurisdiction's sales or use tax, the seller should refer to and must
			 apply the provisions of Rule
			 810-6-2-.90.01 entitled "Seller's Responsibility to Collect and Pay State Sales Tax and
			 Seller's Use Tax."
(5) The
			 following are intended to provide examples of the type of activity that would
			 or would not establish a taxable presence with a local jurisdiction. These
			 examples do not address every business activity conducted by a seller that
			 could establish a taxable presence and impose on the seller the requirement to
			 collect the local tax.
(a) EXAMPLES:
1. Retailer A, a furniture store with its
			 location in the City of Montgomery (Montgomery County), makes sales to
			 customers in Auburn (Lee County) and delivers the furniture sold to Auburn
			 customers into Auburn using its own delivery trucks and its own employees.
			 Because Retailer A has a physical presence (delivery trucks and employees) in
			 Auburn (Lee County) it is responsible for collecting and remitting the Auburn
			 and Lee County sales taxes on its sales delivered into those
			 localities.
2. Retailer B, a
			 sporting goods store with its location in the City of Birmingham (Jefferson
			 County), makes sales to customers in Gulf Shores (Baldwin County) and delivers
			 the goods sold to Gulf Shores customers into Gulf Shores via UPS, a common
			 carrier. Retailer B has no other contact with Gulf Shores or Baldwin County.
			 Because Retailer B lacks a physical presence in Gulf Shores (Baldwin County) it
			 is not responsible for collecting and remitting the Gulf Shores or Baldwin
			 County sales tax on its sales delivered into those localities. However, the
			 customer would be responsible for remitting any applicable use tax to Gulf
			 Shores and Baldwin County.
3.
			 Retailer C, a janitorial supply store with its location in the City of Mobile
			 (Mobile County) and with salesmen soliciting sales in the City of Huntsville
			 (Madison County), makes sales to Huntsville customers and delivers the supplies
			 sold to Huntsville customers into Huntsville via UPS, a common carrier. Because
			 Retailer C has a physical presence (salesmen) in Huntsville (Madison County),
			 it is responsible for collecting and remitting the Huntsville and Madison
			 County sales taxes on its sales delivered into those localities.
Note:
State sales tax would still have to be
				collected and remitted in all examples.