HB149 Alabama 2014 Session

Under existing law, when a used automotive part or vehicle is taken as a credit on a new or rebuilt part or a vehicle, sales tax is due on the net difference in price, or when the used automotive part or core is later returned, the purchaser is generally refunded the value of the returned used part or core plus any sales tax originally paid. However, by exception in the law, when a used automotive battery is taken as a credit on a new battery, this provision does not apply and sales tax is due on the full purchase price of the new battery without regard to any credit for the return of the old battery.

This bill would delete the above exception on the trade-in of a used automotive battery for a new battery. The sales tax due would be based on the net price of a new automotive battery less any credit for return of the old battery.

Relating to sales tax; to amend Section 40-23-2 of the Code of Alabama 1975, providing generally that sales tax is levied on the net difference in the price when a used automotive part is taken in an exchange in the purchase of a new part or rebuilt part, to delete an exception on the purchase of a new automotive battery requiring sales tax to be paid on the full purchase price when an old battery is exchanged or returned.