Tax & Accounting Blog

Alabama Introduces Remote Seller Notification Bill

Indirect Tax, Sales and Use Tax April 6, 2011

On March 29th legislation was introduced in the Alabama House that would require remote sellers who do not collect to tax to notify purchasers of their use tax obligations at the time of purchase as well send a yearly reminder statement to those purchasers.

Notification Requirement

HB365 would require that the following notification be given by all retailers subject to the requirement: “The State of Alabama and its local governments require the payment of a sales or use tax on purchases of tangible personal property (for example, furniture, books, clothing, jewelry, or household goods) for storage, use, or consumption in Alabama. Since we have not collected sales or use tax from you on this purchase, the State of Alabama requires you to remit the tax directly to the Alabama Department of Revenue and applicable counties and cities on taxable purchases. You can find information on how to pay this tax at Failure to pay this tax on taxable purchases is a violation of Alabama and local laws and could result in penalties and interest for each purchase.” In an interesting twist the purchaser would be required to acknowledge that they read and understood the notification for the requirement to be satisfied.

Annual Reporting Requirement

Sellers would also be required to send purchasers an annual statement each year no later than January 31st. The statement would include (1) a statement that tax was not collected on the transaction and that the purchaser may be required to remit the tax due; (2) a list of purchases by date, including the price of each item purchased; (3) instructions on how to remit the tax and obtain additional information regarding the tax; and (4) other information that the Department of Revenue may reasonably require.

To read the bill in its entirety see the Alabama House website:
H.B. 365, as introduced in the Alabama House of Representatives on March 29, 2011