Alabama Adopts Rule for Taxability of Prepaid Wireless Services

Alabama has adopted a new sales and use tax rule on sales of prepaid wireless service, effective March 27, 2015. The new rule provides that sales of prepaid wireless services constitute the sale of tangible personal property subject to sales or use tax. The rule also provides that sales of prepaid telephone calling cards and prepaid authorization numbers constitute sales of tangible personal property subject to sales or use tax. For transactions that occurred prior to July 1, 2014 for which the consumer did not receive from the retailer either an authorization number or a physical card, the Department of Revenue or local tax officials cannot seek payment for sales tax not collectednor can the taxpayer or the entity remitting sales tax seek a refund of such tax paid. (Rule 810-6-5-.36.01, Alabama Department of Revenue, effective March 27, 2015)

Posted on April 27, 2015