More Sales Tax Changes for Alabama

Alabama has initiated a number of sales tax changes, including the new ONE SPOT system a few months back. Our software works with ONE SPOT to make filing easier, allowing you to finish in an hour or less on average. But if you’re also not aware of new sales tax changes in the way nexus works in Alabama, you’re in for a surprise. The new law that changes nexus to a more common standard definition of nexus goes into effect January 1. If you do business in Alabama or plan on doing business there, be sure you’re up on the latest nexus rules. The new sales tax code 810-6-5-.04.02 outlines that local sales tax nexus works the same way as statewide sales tax nexus in Alabama. This law replaces 810-6-3-.51.

The law now specifically applies what would have originally only created state nexus, resulting in collection of state sales tax, to local sales tax. For instance, if you are an out-of-state business selling to a customer in Alabama and have collected Alabama sales tax in the past, you likely now need to collect any applicable local sales tax too. The new law instructs businesses to use 810-6-2-.90.01’s list of nexus creating actions to determine their nexus situation. Be sure to read through the new law and the situations when nexus is created to ensure your business is complying with the new rule. While it became a law in November, it doesn’t go into effect until January 1, so you’ve got a bit of time to get your nexus issues sorted out if you do business in Alabama.

With ONE SPOT, it was only a matter of time before municipalities started asking for the state to force businesses to collect their sales tax. Before, when you had to remit to each individual local sales tax jurisdiction instead of one place—making it nearly impossible to manage and impossible to enforce on a large scale. With ONE SPOT, your business has a much easier job of dealing with local sales tax but that also means it’s easier to auditors to initiate an inspection of your business and sales tax filings. Make sure that your sales tax processes are ready to meet the new nexus standards in Alabama and keep up with your filings.

Latest Articles

Sales Tax Software

Sales Tax Software

Sales tax calculations and filing can be done by hand. When you make a sale, you figure out whether the goods and services are taxable and whether you have nexus in the buyer's tax jurisdiction. More on that later. Once you've determined that you need...

read more
Customer Service and Your Sales Tax Solution

Customer Service and Your Sales Tax Solution

Sales tax is complicated. We've just gone through the annual flurry of back to school tax holidays, for example. If you're a remote seller of clothing, you probably sell mostly through retail. But you might have some direct to consumer sales. In some...

read more
Sales Tax Holidays for E-commerce

Sales Tax Holidays for E-commerce

A lot of our clients are manufacturers, contractors, or in some other industry that doesn't usually have to think much about sales tax. Retailers know they have to collect sales tax, and usually plan for it. We often hear from people who had no idea...

read more