HB116 By Representative Scott RFD Ways and Means General Fund Rd 1 03-FEB-16

SYNOPSIS: This bill would allow eligible sellers to continue to participate in the program, under certain circumstances, even if the seller later establishes a physical presence in Alabama. This bill would also allow participating eligible sellers to continue to participate in the program unless federal legislation removes current federal limitations on the ability of the State of Alabama to enforce its sales and use tax jurisdiction against businesses that lack an instate physical presence.

A BILL TO BE ENTITLED AN ACT

To amend Sections 40-23-191 and 40-23-198, Code of Alabama 1975, to update the definitions relating to simplified sellers use tax; to update references to federal legislation on the enforcement of sales and use tax as it relates to eligible sellers remitting simplified sellers use tax.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Sections 40-23-191 and 40-23-198, Code of Alabama 1975, are amended to read as follows:

§40-23-191.

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

"(b) For the purpose of this part, 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. Such seller shall remain eligible for participation in the Simplified Use Tax Remittance Program unless the seller establishes a presence through a physical business address for the purpose of making instate retail sales within the state of Alabama or becomes otherwise required to collect and remit sales or use tax pursuant to Section 40-23-190 through an affiliate making retail sales at a physical business address in Alabama, provided the seller was a participant in the program for at least 6 months prior to establishing such physical presence or filing obligation.

"(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 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 part.

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

"(6) STATE. The State of Alabama.

§40-23-198.

"In the event that a change in federal law, whether it be federal legislation or decision of the U.S. Supreme Court, the enactment of federal legislation 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 part 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 part 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 part 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 part and shall continue to report sales under the conditions set out in Section 40-23-193."

Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Taxation

Sales and Use Tax

Business and Commerce

Revenue Department

Code Amended