HB75

ENROLLED, An Act,

To establish the Wholesale to Retail Accountability Program or “WRAP”. To standardize the reporting of sellers of tobacco products and distributors of beer and wine to file informational reports on sales for resale purposes made within this state on which sales or use tax was not collected; to provide electronic filing of required informational reports; to establish an industry advisory group; to provide penalties for noncompliance; to authorize the Department of Revenue to adopt rules; to provide for duplicate information reporting from reporting entities as defined in Section 6050W of the Internal Revenue Code; to provide for information on municipal business privilege license applications to be submitted to the department.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. (a) This act shall establish the Wholesale to Retail Accountability Program or “WRAP”.

(b) For the purpose of this act, the following words shall have the following meanings:

(1) DEPARTMENT. The State Department of Revenue.

(2) LICENSED BEER OR WINE DISTRIBUTOR. A distributor, as licensed by the Alabama Alcoholic Beverage Control Board, selling or distributing beer or wine in this state.

(3) PERSON. Any individual, firm, partnership, association, corporation, limited liability company, receiver, trustee, or any other entity.

(4) RETAILER. A person or group of persons that have a relationship with each other as defined in Section 267(b) of the federal Internal Revenue Code whose primary business is the sale of tangible personal property at retail, including supporting operations such as warehousing, shipping, and storage of product, and who holds a license pursuant to Section 40-23-6 or 40-23-66, Code of Alabama 1975.

(5) SELLER. A manufacturer, wholesaler, or distributor of beer, wine, or tobacco products who sells to a retailer in this state. The term also includes a wholesale club or warehouse club that sells tobacco under a membership.

(c) For the purpose of enforcing the collection of taxes levied by Chapter 23 of Title 40, Code of Alabama 1975, on the sale of tangible personal property, every seller of tobacco products making sales within this state on which sales or use tax was not collected at the time of the sale and every beer or wine distributor, shall file informational reports with the department pursuant to subsection (d) as follows:

(1) Each licensed beer or wine distributor shall report sales of any beer or wine made to licensees for which an exemption from sales or use tax collection was claimed at the time of the sale. A licensed beer or wine distributor who donates beer or wine in the same manner as a retailer making a gift pursuant to Section 40-23-1(f) shall not be required to report such transaction under this act and is subject to the same exemption as a retailer making a gift pursuant to Section 40-23-1(f).

(2) Each seller of tobacco products, selling or distributing to retailers in this state, shall report sales of tobacco products for which exemptions from sales or use tax were claimed at the time of the sale.

(d) The informational report shall be filed in the following manner as provided by the department:

(1) The information provided in the report from each seller or distributor required in subdivision (1) of subsection (c) shall include seller’s legal name, seller's address, seller's beverage license number, if applicable, retailer's name, retailer's address, total dollar amount sold for the reporting period, invoice period, invoice date and applicable Alabama Alcoholic Beverage Control Board license number provided by the retailer.

(2) The information provided in the report from each seller or distributor required in subdivision (2) of subsection (c) shall include the seller's legal name, seller's address, retailer's name, retailer's address, total dollar amount sold for the reporting period, and applicable sales tax number provided by the retailer. The department shall allow the seller to file a consolidated report to meet the requirements of Section 40-25-16.1, Code of Alabama 1975, and this act.

(3) The department shall provide an electronic filing mechanism for submission of the informational report to the department.

(4) The informational report shall be due on or before the 20th day of the month next succeeding the month in which a sale occurs. The first informational report due shall be for sales occurring on or after July 1, 2018.

(e) If a seller fails to properly file the required informational report in good faith with the department on or before the prescribed date, the following penalties shall apply on or after January 1, 2019 and each reporting period thereafter:

(1) The first violation of this section shall result in a written notice from the department. The notice shall advise the seller of the non-compliance and the penalty for future non-compliance if the required informational reports is not filed within 30 days from the written notice as provided herein.

(2) The second violation of this section shall result in a penalty not to exceed five hundred dollars ($500).

(3) The third and each subsequent violation of this section shall result in a penalty not to exceed one thousand dollars ($1,000).

(f) The department shall not initiate an automated assessment or automated audit based solely on data provided to the department in the informational reports.

(g) The informational report filed with the department shall be subject to the exchange of information provisions set forth in Title 40, Chapter 2A, Section 10, Code of Alabama 1975 for municipal and county government agencies in this state. Effective January 1, 2022, the department shall be the sole source for municipal and county government agencies to obtain sales information that is required to be provided under this act to the department.

(h)(1) To ensure that taxpayers and industry have meaningful input into the informational reports, a Wholesale and Distributor Reporting Advisory Group is hereby established to make recommendations regarding the reporting of the informational reports required herein.

(2) The advisory group shall consist of the following individuals:

a. One representative from the Alabama Department of Revenue as designated by the Commissioner who shall serve as chair of the group.

b. One representative of county government, appointed by the Association of County Commissions of Alabama.

c. One representative of municipal government, appointed by the Alabama League of Municipalities.

d. One representative of the industry community, appointed by the Alabama Wholesale Beer Association.

e. One representative of the tobacco industry community, appointed by the Alabama Wholesale Distributors Association.

f. One representative of the retail community, appointed by the Alabama Retail Association.

g. One representative from the Alabama Alcoholic Beverage Control Board as designated by the Administrator.

h. One representative of the industry community, appointed by the Alabama Beer Association.

i. One representative of the industry community, appointed by the Alabama Grocers Association.

j. One representative of the industry community, appointed by the Petroleum and Convenience Marketers of Alabama.

k. One representative of the industry community, appointed by the Cigar Association of America, Inc.

l. Three additional industry representatives as designated by the Commissioner of Revenue.

(3) The designating and appointing authorities shall coordinate their designations and appointments to assure the advisory group is inclusive and reflects the racial, gender, geographic, urban, rural, and economic diversity of the state.

(4) a. The advisory group shall receive no compensation or reimbursement of expense from the state for serving on the committee.

b. The advisory group shall meet with the Designee of the Commissioner of Revenue and with other employees of the department as the commissioner deems appropriate. The meeting times and place will be determined by the designee of the commissioner.

c. The role of the advisory group shall be limited to providing industry input and recommendations towards the filing of required informational reports. The group shall make no review of any other department matter beyond the recommendation of required reporting by this act.

(i) By no later than January 15, 2020, the department shall submit a report regarding the implementation, administration, achievements, and suggested improvements related to the WRAP Program to the Chairs of the House Ways and Means General Fund and Education Trust Fund Committees and the Senate Finance and Taxation General Fund and Education Trust Fund Committees and the Legislative Fiscal Office.

Section 2. (a) The Department is authorized to require that every payment settlement entity, third party settlement organization, electronic payment facilitator, or other third party acting on behalf of a payment settlement entity, all as defined in Section 6050W of the Internal Revenue Code and referred to herein as a reporting entity, required to file information reports pursuant to that section shall, within thirty (30) days of the filing due date, file with the department in such form and manner as prescribed by the department either a duplicate of all such information returns or a duplicate of such information returns related to taxpayers or participating payees, as defined in Section 6050W of the Internal Revenue Code, with an Alabama address. The department may require that such duplicate information returns be filed electronically.

(b) The information received by the department on a duplicate information return filed pursuant to this section shall be used only for taxes administered by the department.

(c) Any reporting entity failing to file a duplicate information return with the department on or before the prescribed date shall be subject to the following penalties:

(1) The first violation shall result in a written notice from the department. The notice shall advise the reporting entity of the non-compliance and the penalty for future non-compliance if the required duplicate information return is not filed within 30 days from the written notice as provided herein.

(2) The subsequent violation(s) shall result in a penalty not to exceed one-thousand dollars ($1,000) for each month or fraction of a month during which each failure continues.

Section 3. (a) Information on all municipal business privilege license applications for new licenses and renewals issued on or after October 1, 2019, shall be electronically transmitted to the department by the licensing official or agent in the same manner as privilege licenses issued pursuant to Chapter 12 of Title 40, Code of Alabama 1975.

(b) The department may adopt rules to administer and implement this section.

Section 4. Section 1 of this act is limited to the reporting of certain information to the Department of Revenue and shall not be construed as limiting or changing the existing record keeping requirements as provided in Section 40-23-9.

Section 5. All laws or parts of laws which conflict with this act are repealed.