SB437

By Senators Pittman, Dial, Bussman, Holtzclaw, Chambliss, Sanford, Marsh, Williams, Reed, Ross and Smitherman

ENROLLED, An Act,

Relating to simplified sellers use tax to establish an easily-accessible method for eligible sellers to remit, on behalf of their customers, use tax on items delivered into Alabama.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Sections 40-23-191 through 40-23-199 are hereby added to Division 3 of Article 6 of Chapter 23 of Title 40 of the Code of Alabama 1975, as follows:

§40-23-191.

"(a) This act shall be titled “The Simplified Seller Use Tax Remittance Act”.

"(b) For the purpose of this act, the following terms shall have the respective meanings ascribed to them in this section:

"(1) DEPARTMENT. The Alabama Department of Revenue.

"(2) ELIGIBLE SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation or other legal entity that sells tangible personal property or a service, but does not have a physical presence in this state or is not otherwise required to be subject to requirements for collecting and remitting state and local sales or use tax for sales delivered into the state.

"(3) LOCALITY. A county, municipality, or other local governmental taxing authority which levies a local sales and/or use tax.

" (4) SIMPLIFIED SELLERS USE TAX. The eight percent (8%) tax to be collected, reported, and remitted by eligible sellers who are participating in the program pursuant to requirements and procedures established pursuant to this act.

"(5) SIMPLIFIED USE TAX REMITTANCE PROGRAM or PROGRAM. The program established in this act to provide a mechanism for eligible sellers to collect, report, and remit the simplified sellers use tax established pursuant to this act.

"(6) STATE. The State of Alabama.

"§40-23-192.

"(a) There is hereby established The Simplified Sellers Use Tax Remittance Program designed to allow an eligible seller who participates in the program to collect, report, and remit the simplified sellers use tax authorized herein in lieu of the sales or use taxes otherwise due by or on behalf of Alabama customers who have purchased items from the eligible seller that were shipped or otherwise delivered into Alabama by the eligible seller. Participation in the program shall be by election of the eligible seller and only those eligible sellers accepted into the program as set out herein shall collect and remit the simplified sellers use tax. Participation in the program shall not be construed as subjecting an eligible seller to franchise, income, occupation, or any other type of taxes or licensing requirements levied or imposed by the state of Alabama or any locality.

"(b) The program shall be administered by the department, which pursuant to this act, shall develop and make available to the eligible seller an easily-accessible, online system in which to collect, report, and remit the simplified sellers use tax. Participants in the program shall be required to collect, report, and remit the simplified sellers use tax for all sales delivered into the state as long as remaining a participant in the program. Eligible sellers may continue in the program as long as they comply with all provisions of this act and procedures adopted by the department for participation in the program.

"(c) In order to participate in the program, an eligible seller shall make application with the department on a form designed by the department for that purpose. The application shall require, at a minimum, that the eligible seller:

"(1) Certifies that he or she is an eligible seller as defined herein.

"(2) Agrees to collect, report, and remit the simplified sellers use tax for all sales delivered into the state as long as he or she remains a participant in the program.

"(3) Agrees to provide the department with information related to sales to Alabama customers as required by this act or requested by the department.

"(4) Agrees to comply with all program reporting requirements established under program procedures.

"Any applicant who falsely certifies on his or her application that he or she is an eligible seller with the state of Alabama shall be subject to the negligence and/or fraud penalties under procedures found in Section 40-2A-11.

"(d) The department shall review all applications for participation, and where an applicant is determined to satisfy requirements to participate in the program, shall establish a simplified sellers use tax account for the eligible seller which will allow the eligible seller to report and remit all simplified sellers use tax collected pursuant to this act.

"(e) A participating eligible seller shall be removed from the program if:

"(1) He or she substantially fails to collect, report, and remit simplified sellers use taxes.

"(2) He or she fails to submit required reports on a timely basis.

"(3) Upon a determination that the seller is no longer an eligible seller, as defined by this act.

"(4) There is any other finding by the department that the participant is not in compliance with the terms authorizing participation in the program.

"Any participant who fails to report that he or she is no longer eligible for participation in the program or falsely certifies on any report that he or she is eligible shall be subject to the negligence and/or fraud penalties under procedures found in Section 40-2A-11. Removal from the program or assessment of the fraud or negligence penalty shall be subject to appeal rights and procedures established in this title.

"§40-23-193.

"(a) The simplified sellers use tax due under the program is eight percent (8%) of the sales price on any tangible personal property sold or delivered into Alabama by an eligible seller participating in the program. The collection and remittance of simplified sellers use tax relieves the eligible seller and the purchaser from any additional state or local sales and use taxes on the transaction.

"(b) The simplified sellers use tax collected by the eligible seller, at the rate of eight percent, shall be electronically reported in the manner prescribed by the department on or before the 20th day of the month next succeeding the month in which the tax accrues. The eligible seller shall remit the tax at the required rate or the amount of the tax collected, whichever is greater. The required monthly reporting from the eligible seller shall only include statewide totals of the simplified sellers use taxes collected and remitted, and shall not require information related to the location of purchasers or amount of sales into a specific locality. The department may not require an eligible seller to report and remit the simplified sellers use tax more frequently than is required for other sellers.

"(c) No eligible seller shall be required to collect the tax at a rate greater than eight percent (8%), regardless of the combined actual tax rates that may otherwise be applicable. Additionally, no sales for which the simplified sellers use tax is collected shall be subject to any additional sales or use tax from any locality levying a sales or use tax with respect to the purchase or use of the property, regardless of the actual tax rate that might have otherwise been applicable.

"(d) The participating eligible seller shall collect the tax on all purchases delivered into Alabama unless the purchaser furnishes the eligible seller with a valid exemption certificate, sales tax license, or direct pay permit issued by the department. The eligible seller shall retain all exemption certificates, sales tax licenses, or direct pay permits in its files, or in such other manner as directed by the department.

"(e) The eligible seller shall provide the purchaser with a statement or invoice showing that the simplified sellers use tax was collected and is to be remitted on the purchaser’s behalf. The statement shall be in a manner prescribed by the department and shall include the eligible seller’s program account number issued by the department upon the eligible seller’s approval as a participant in the program.

"§40-23-194.

"Eligible sellers may deduct and retain a discount equal to two percent of the simplified sellers use tax properly collected and then remitted to the department in a timely manner. The department is authorized to prescribe rules for administering the discount. No discount shall be allowed for any taxes which are not timely reported and remitted to the department pursuant to program procedures.

"§40-23-195.

"(a) The department may adopt, promulgate, and enforce reasonable rules and regulations related to the implementation, administration, and participation in the program. The department shall have exclusive responsibility for reviewing and accepting applications for participation and for the administration, return processing, and review of the eligibility of sellers participating in the program. Eligible sellers participating in the program shall not be subject to audit or review by any Alabama locality. Eligible sellers shall maintain records of all sales delivered into Alabama, including copies of invoices showing the purchaser, address, purchase amount, and simplified sellers use tax collected. Such records shall be made available for review and inspection upon request by the department.

"§40-23-196.

"(a) Any taxpayer who pays a simplified sellers use tax through this program that is higher than the actual state and local sales or use tax levied in the locality where the sale was delivered may file for a refund or credit of the excess amount paid to the eligible seller participating in the program. A business taxpayer who has a registered consumer use tax account with the department may claim credit for the overpayment of simplified use tax on their consumer use tax return in a manner prescribed by the department. All other taxpayers may file a petition for refund in the manner prescribed by the department. The petition for refund may only be filed once per year. In the event the amount due to be refunded in a year is less than twenty-five ($25.00) dollars, payment of the refund may be deferred by the department and combined with amounts due to be paid pursuant to subsequent annual refund petitions for a period of up to three years.

"(b) Any taxpayer seeking a refund or credit of excess taxes paid to an eligible seller participating in the program shall maintain records documenting the amount of simplified sellers use tax paid. Refund or credit requests shall require proper documentation of amounts paid by the taxpayer and shall be submitted to the department with the petition for refund.

"(c) Notwithstanding any other provision of law, interest due on any refund of taxes paid directly to the department under Division Three of Article Six of this chapter shall be paid beginning 90 days after the receipt date of the properly documented refund petition with interest accruing beginning on the 91st day.

"§40-23-197.

"(a) The proceeds of simplified sellers use tax paid pursuant to this act shall be appropriated to the department, which shall retain the amount necessary to fund the administrative costs of implementing and operating the program and to cover the amounts paid for refunds authorized in §40-23-196. The balance of the amounts collected shall be distributed as follows:

"(1) Fifty percent (50%) to the state treasury and allocated seventy-five percent (75%) to the General Fund and twenty-five percent (25%) to the Education Trust Fund.

"(2) Twenty-five percent (25%) to each county in the state on a prorated basis according to population as determined in the most recent federal census prior to the distribution.

"(3) Twenty-five percent (25%) of funds to be distributed to each municipality in the state on a prorated basis according to population as determined in the most recent federal census prior to the distribution.

"(b) The distribution of the proceeds from the simplified sellers use tax paid to counties and municipalities shall occur quarterly in a manner prescribed by the Department.

"§40-23-198.

"(a) In the event that a change in federal law, whether it be federal legislation or decision of the U.S. Supreme Court, removes current federal limitations on states’ ability to enforce their sales and use tax jurisdiction against businesses that lack an instate physical presence, the provisions of this act shall be inapplicable as to any eligible seller who is not registered with the department as a participant in the program at least six months prior to the date of such change in law. In such event, the provisions of this act will continue to apply to any eligible seller who has been approved by the department as a participant in the program at least six months prior to the change in law and to any taxpayer who has paid or pays the simplified sellers use tax authorized under this act provided the eligible seller continues to collect, report, and remit the simplified sellers use tax and otherwise complies with all procedures and requirements of the program. Eligible sellers participating in the program pursuant to this subsection may continue to receive a discount of two percent (2%) on all simplified sellers use taxes properly remitted under the provisions of this act and shall continue to report sales under the conditions set out in Section 40-23-193.

"§40-23-199.

"(a) Subject to the limitations set out herein, an eligible seller participating in the program shall be granted amnesty for any uncollected remote use tax that may have been due on sales made to purchasers in the state for the twelve-month period preceding the effective date of the eligible sellers’ participation in the program.

"(b) The amnesty will preclude assessment for uncollected simplified use tax together with any penalty or interest for sales made during the twelve-month period prior to the effective date of the eligible seller’s participation in the program.

"(c) The amnesty provided herein shall be granted to any eligible seller who applies to participate in the program following acceptance into the program by the department.

"(d) Amnesty is not available to an eligible seller with respect to any matter or matters for which the eligible seller has received notice of the commencement of an audit and the audit is not yet finally resolved, including any related administrative and judicial processes.

"(e) Amnesty is not available for any simplified sellers use tax already paid or remitted to the state or for taxes collected by the eligible seller.

"(f) Amnesty is fully effective, absent the eligible seller's fraud or intentional misrepresentation of a material fact, as long as the eligible seller continues his or her participation in the program and continues to collect, report, and remit applicable simplified sellers use tax for a period of at least thirty-six months.

"(g) Amnesty is applicable only to simplified use tax due from an eligible seller in his or her capacity as an eligible seller and not to remote use taxes due from a seller in his or her capacity as a buyer."

Section 2. This act shall become effective on October 1, 2015, following its passage and approval by the Governor, or upon its otherwise becoming law.

Taxation

Revenue Department

Sales and Use Tax

Non-Nexus Sellers Use Tax

Code Added