Does Alabama Have Economic Nexus Sales Tax Requirements?

Sovos
November 20, 2020

The South Dakota v. Wayfair, Inc. decision paved the way for many states to implement economic nexus requirements.  Prior to Wayfair, Alabama had its own “economic nexus” collection requirement under Rule 810-6-2-.90.03. With Wayfair, Alabama no longer has a constitutional obstacle to enforcing its rule. Below, we’ve highlighted the major points of the Alabama economic nexus requirements. 

Enforcement date:
October 1, 2018.

Sales/transactions threshold:
$250,000.

Measurement period:
Threshold applies to the previous calendar year.

Included transactions/sales:
Retail sales of tangible personal property delivered into the state.

When You Need to Register Once You Exceed the Threshold:
Next transaction.

Summary: The Alabama Department of Revenue (DOR) states that “remote sellers with annual Alabama sales in excess of the rule’s $250,000 small seller exception should register for the Alabama Simplified Sellers Use Tax Program (SSUT) and begin collecting no later than October 1, 2018.” 

Marketplace facilitators must collect tax on sales made by or on behalf of its third-party sellers or to comply with reporting and customer notification requirements. Alabama Act 2018-539 mandates compliance with reporting or remitting requirements on or before January 1, 2019.

Additionally, economic nexus rules are a hybrid of state and local administration. Select cities are locally administered, while counties, most districts and some cities are state administered. Marketplace facilitators may choose to collect and remit sales taxes on behalf of marketplace sellers or comply with reporting and customer notification requirements.

Alabama is just one example of various states’ differing economic nexus requirements. Businesses must ensure that they are compliant with all state and local requirements.

Alabama Sales Tax Resources: Reach out to our team for more information on the Alabama economic nexus sales tax requirements. Also check out our interactive sales tax nexus map to see real-time updates on every state.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Sovos

Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

ShipCompliant United States
December 3, 2020
Illinois’ New Economic Nexus Sales Tax Rules to Affect Direct Wine Shippers

Starting January 1, 2021, many direct-to-consumer (DtC) wine shippers will face an added sales tax burden on their shipments to Illinois. The Illinois Department of Revenue (DOR) published FY 2021-06, which explains the upcoming change. Under the recent “Leveling the Playing Field for Illinois Retail Act,” the state will require all remote sellers with economic […]

EMEA VAT & Fiscal Reporting
December 2, 2020
Brexit and Fiscal Representation

Recently, we outlined the need for speed in understanding fiscal representation obligations. As the UK looks set to become a third country from 1 January 2021, there will be many ramifications for businesses operating cross-border – among them the requirement to appoint a fiscal representative to register for VAT purposes. As outlined in our previous […]

E-Invoicing Compliance EMEA Italy VAT & Fiscal Reporting
December 2, 2020
Italian Tax Controls: Five Key Facts to Know Before the New Year

While Italy rolled out its continuous transaction controls (CTC) reform in 2019, 2020 has been a year of expansion. Italian authorities plan to leverage all potential benefits of the successful implementation of the country’s central e-invoicing platform. Many of the updates will either be launched or enforced in the upcoming year, or later in 2022. […]

Tax Compliance Tax Information Reporting United States
December 1, 2020
Unclaimed Property Dormancy Periods by State: What You Need to Know

Understanding unclaimed property dormancy periods by state and executing the appropriate decisions can make or break your company’s unclaimed property program. This is due primarily to the fact that each state has varying dormancy periods. To complicate matters even further, each state has specific dormancy periods for each corresponding property type. As a result, determining […]

Sales & Use Tax United States
December 1, 2020
How Was the Nevada Economic Nexus Law Modified?

When the Supreme Court ruled on South Dakota v. Wayfair, Inc., remote sellers and marketplace facilitators across the country had to make changes in how they collected and remitted sales tax. The Nevada economic nexus law is one example of a state modifying its requirements for both remote sellers and marketplace facilitators in relation to […]