HB365 Alabama 2011 Session

Summary

Primary Sponsor

Jamie Ison

Republican

Session

Regular Session 2011

Title

Sales and use tax, consumer use tax, Internet retailers required to inform Alabama purchasers of duty to pay required state and local sales tax, Revenue Department authorized to amend personal income tax forms to facilitate collection of tax on Internet sales, Secs. 40-23-89, 40-23-90 am'd. (2011-20358)

Summary

HB365 would require retailers to inform Alabama buyers about use tax obligations, provide annual purchase summaries, and let the state collect use tax through residents' income tax returns with revenue shared with local governments.

What This Bill Does

It adds notification and reporting duties for retailers that do not collect tax, including a required notice on websites, catalogs, and receipts and an annual purchase summary to purchasers; it also sets penalties for noncompliance. It authorizes the Department of Revenue to collect state and local consumer use taxes via the purchaser’s annual income tax return, with optional voluntary remittance and a method to estimate tax for those who keep fewer records. It also creates rules for distributing use tax revenue between the state and local governments and provides exemptions for small retailers; the act specifies when each section becomes effective.

Who It Affects

• Alabama residents and part-year residents who buy tangible personal property from retailers that do not collect sales or use tax; they would receive notices and annual purchase summaries and may remit use tax through their income tax return.
• Retailers selling tangible personal property to Alabama residents that do not collect tax (including online and catalog sellers); they must display use tax notices, provide annual purchase summaries, may face penalties for noncompliance, and small retailers meeting certain sales thresholds may be exempt.

Key Provisions

• Adds 40-23-89 requiring retailers not collecting tax to notify purchasers of use tax obligations on websites, catalogs, and invoices, with purchaser acknowledgment; penalties up to $1,000 per violation plus interest.
• Requires retailers to send an annual purchase summary to Alabama purchasers by January 31, detailing purchases and providing tax remittance information; failure to comply can disqualify the retailer from selling to Alabama entities.
• Exempts certain small retailers from these requirements if total Alabama gross sales were $10,000 or less in the prior year and are expected to remain under $10,000.
• Adds 40-23-90 authorizing the Department of Revenue to collect state and local use taxes via the purchaser’s annual income tax return, with voluntary remittance available and a table or estimates based on income to simplify reporting.
• Allocates use tax revenue collected via income tax returns: 10% of the aggregate use tax, with 40% to the Education Trust Fund and the remainder to local governments; distributions occur twice yearly and follow a specified allocation method by address and population, with possible rule-based adjustments.
• Allows the department to issue rules to implement these provisions; prohibits certain tax-free advertising; includes severability and different effective dates for sections.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation