We would like to remind our clients or raise your awareness on a new rule that went into effect January 1, 2016 for transactions within the State of Alabama. Out-of-state businesses with “substantial economic presence” in Alabama must now collect and remit sales taxes, even if they do not have a physical presence (nexus) within the State of Alabama.
“Substantial economic presence” includes sales of $250,000 or more in the prior year along with certain activities including having a licensee or franchisee in the state, or engaging in advertising or solicitation in the state.
Clients with more than $250,000 of sales in Alabama in 2015 should determine their method of collection by analyzing the different methods provided by the Alabama Department of Revenue.
If you need assistance determining the appropriate collection method or would like to discuss this matter further, please contact Tim Howe at (404) 879-3320 or by email or Marvin Willis at (404) 874-6244 or by email.