Last chance for Alabamans to shop Amazon tax free
- Oct 28, 2016 | Gail Cole
Residents of Alabama have just a few days left of tax-free shopping on Amazon.com. Beginning Tuesday, November 1, 2017, the ecommerce giant will begin collecting tax on Alabama transactions.
Amazon doesn’t have a physical presence in Alabama but has voluntarily agreed to comply with Alabama’s Simplified Seller Use Tax Remittance Act of 2015. There are benefits to doing so. Alabama sources sales to the destination (the location of the buyer) and local rates in Alabama vary considerably; vendors participating in the Simplified Seller Use Tax Remittance program are entitled to collect and remit “a flat 8% seller’s use tax on all sales made into Alabama” regardless of the destination, instead of the various combined state and local rates.
Additionally, should a United States Supreme Court ruling or the enactment of federal legislation (e.g., the Marketplace Fairness Act or Remote Transactions Parity Act) grant states the right to “enforce their sales and use tax jurisdiction against businesses that lack a physical presence,” businesses that have been participating in the use tax remittance program for at least six months prior to the change are entitled to continue in the program. Other businesses will have to collect the varying rates in effect in each jurisdiction.
According to the Alabama Department of Revenue, the use tax remittance program is expected to generate between $40 and $50 million in 2017.
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