South Dakota v. Wayfair Update: Alabama

On July 3, 2018, following the South Dakota v. Wayfair decision, the Alabama Department of Revenue announced its existing “economic nexus” rule 810-6-2-.90.03, which took effect in January 2016, will be applied prospectively for sales made on or after October 1, 2018. 

Remote sellers with more than $250,000 in annual Alabama sales should register for the Alabama Simplified Sellers Use Tax Program (SSUT) and begin collecting no later than October 1, 2018. Remote sellers seeking to comply with this existing rule can register to collect SSUT here.

In addition, marketplace facilitators with Alabama online sales in excess of $250,000 are required to collect tax on sales made by or on behalf of its third-party sellers or to comply with reporting and customer notification requirements. The Act mandates compliance with reporting or remitting requirements on or before January 1, 2019. However, marketplace facilitators desiring to collect and remit on behalf of their marketplace sellers starting on October 1 may begin collecting and remitting taxes on marketplace sales may do so through the SSUT program upon completion of the application and registration process.

New Sales Tax Landscape for Online Sellers

The recent U.S. Supreme Court ruling in South Dakota v. Wayfair overturning the long-held Quill decision will dramatically change the landscape for online sellers when it comes to sales tax.

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