HB470 Alabama 2018 Session

Summary

Primary Sponsor

Rod Scott

Democrat

Session

Regular Session 2018

Title

Sales and use tax, Simplified Seller Use Tax Remittance Program, out-of-state vendors, physical presence through acquisition of in-state company authorized, sales of tangible personal property subject to sales tax, marketplace facilitators, collection, Secs. 40-23-190, 40-23-191 am'd.

Summary

The bill broadens remote-seller rules by letting certain out-of-state vendors gain Alabama presence via acquiring an in-state company to join the Simplified Sellers Use Tax program, requires marketplace facilitators to collect or report the tax, and changes local revenue sharing plus adds a 1% municipal tax on some marketplace transactions.

What This Bill Does

It allows an out-of-state vendor that establishes physical presence in Alabama only through acquiring an in-state business to participate in the Simplified Sellers Use Tax Remittance Program. It updates nexus rules to treat certain related-party relationships as creating substantial nexus for tax collection and lets eligible vendors continue in the program after acquisition. It requires marketplace facilitators with Alabama sales above a threshold to collect and remit the simplified sellers use tax or report such sales, and to keep records and provide purchaser notices. It changes how proceeds from the simplified sellers use tax are distributed to local governments starting in 2019 and adds a 1% additional tax on qualifying marketplace transactions delivered in Alabama, with refunds available for overpayments.

Who It Affects

• Out-of-state vendors that gain physical presence in Alabama through the acquisition of an Alabama-based company; they may elect to participate in the Simplified Sellers Use Tax Remittance Program to collect and remit Alabama taxes.
• Marketplace facilitators and marketplace sellers delivering sales in Alabama; they must register or report and remit the simplified sellers use tax (or report sales) if they exceed the qualifying amount, maintain records, and comply with related rules.

Key Provisions

• Nexus rules are amended to consider related-party relationships and coordinated business activities as creating substantial nexus for state and local use tax collection.
• An out-of-state vendor that establishes physical presence in Alabama solely through acquiring an in-state business may elect to satisfy tax collection/remittance requirements by continuing participation in the Simplified Sellers Use Tax Remittance Program.
• Definition of eligible seller and marketplace facilitator; marketplace facilitators with more than the qualifying amount must collect/remit or report simplified sellers use tax on Alabama shipments, with records kept and provided to the Department.
• A 2% discount is available for timely remittance of the simplified sellers use tax, but the discount is capped for periods beginning January 1, 2019 at taxes up to $400,000 per period.
• Proceeds from the simplified sellers use tax are distributed to state and local governments, with a revised split effective January 1, 2019: 60% to municipalities and 40% to counties, shifting from prior allocations.
• A new 1% additional simplified sellers use tax is imposed on qualifying sales delivered in Alabama, with revenue distributed to municipalities by population; refunds/credits available for overpayments and an online refunds process to be phased in.
• Section clarifications limit the use of the Simplified Sellers Use Tax Remittance Program to avoid overlapping with other sales taxes, and authorize rules and regulations for administration and enforcement.
• The act becomes effective immediately upon passage and approval; departments must implement online processes for refunds and reporting changes.

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