HB318 Alabama 2019 Session

Summary

Primary Sponsor

Rod Scott

Democrat

Session

Regular Session 2019

Title

Relating to simplified sellers use tax; to modify certain definitions; to clarify when certian taxes can or cannot be remitted; and to provide for adjustments to simplified sellers use tax. Amended code sections: 40-23-191, 40-23-192, 40-23-193, 40-23-195, 40-23-199.2

Summary

HB 318 would modify Alabama's simplified sellers use tax by clarifying when it applies, expanding who must collect it (including marketplace facilitators), and adding a one-time rate calculation plus a local rate adjustment to better align with state and local taxes.

What This Bill Does

It clarifies which transactions can be taxed under the simplified program and which require regular state/local taxes. It creates a one-time calculation of the combined average tax rate (state + county + municipal) and adjusts the simplified tax rate to match that total through a local rate adjustment. It expands participation to marketplace facilitators and sets eligibility rules, reporting requirements, and penalties for false certification. It also specifies how the local adjustment would be distributed and sets key effective dates for these changes.

Who It Affects

• Eligible sellers participating in the Simplified Sellers Use Tax Remittance Program; their eligibility, reporting duties, and potential removal for noncompliance are clarified, and they would continue to collect/remit an 8% simplified tax on eligible sales.
• Marketplace facilitators and marketplace sellers; they would be required to collect and remit the simplified sellers use tax on Alabama sales through marketplaces, keep required records, and may have amnesty protections and limited locality audits for these transactions.

Key Provisions

• Defines and updates key terms (eligible seller, eligible sale, marketplace facilitator, marketplace seller, locality, etc.) and expands eligibility definitions to include marketplace facilitators for simplified use tax.
• Establishes the Simplified Sellers Use Tax Remittance program with an online system; eligible sellers participate voluntarily and must meet reporting and certification requirements; noncompliance can lead to removal and penalties.
• Sets the simplified sellers use tax rate at eight percent for eligible sales, with monthly electronic reporting due by the 20th; no higher rate can be charged and no additional local taxes apply to these transactions.
• clarifies that certain transactions must still be taxed under state/local rules (e.g., deliveries to locations where the seller has a physical Alabama presence or in-state sellers not participating).
• Requires a one-time calculation of the combined rate (state + average county + average municipal rates) and a local rate adjustment to approximate that rate, to be in place by late 2019; the adjustment applies starting October 1, 2020 and may add up to one percentage point above the simplified rate.
• Distributes the local rate adjustment proceeds according to existing statutes (40-23-197 and 40-23-196) with any prescribed deductions; local rates are capped at the combined rate limit.
• Repeals Section 40-23-190 and makes other conforming changes; the act becomes effective October 1, 2019.
• Marketplace facilitators must register or report under the simplified tax framework if they meet the qualifying amount threshold and must follow reporting, recordkeeping, and other regulatory requirements specific to marketplace sales.

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

Subjects

Sales and Use Tax