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The Internal Revenue Service has introduced a new online tool - The Sales Tax Calculator - to help individual taxpayers determine the amount of optional general sales tax that they are eligible to claim on their tax return. The tool replaces the traditional use of the general sales tax tables in Publication 600, State and Local General Sales Tax, for 2006 returns or can also be replaced for the 2005 Instructions for Schedules A&B. The calculator is completely anonymous and the information collected is exclusively used to determine the taxpayer’s total allowable deduction to be reflected on Schedule A. All entries made are automatically erased when the user exits the calculator or starts over. The taxpayer inputs a few entries from Form 1040 and their ZIP Code, and the calculator will figure the amount of state and local sales tax the taxpayer can claim. Moreover, the Sales Tax Calculator may still be used even if state and local sales tax rates changed during the year. The tool is available at http://www.IRS.gov. Enter Sales Tax Calculator into the search box. (Internal Revenue Services Website; Sales Tax Calculator)

(02/15/2007)

Alabama has provided for an annual sales tax holiday beginning on the first Friday in August and ending the following Sunday. For 2007, the dates are August 3-5. The holiday covers articles of clothing selling for under $100., but does not apply to separately sold belt buckles, costume masks, patches, sewing equipment and supplies, accessories, protective equipment or sports equipment. The holiday also covers purchases of computers, computer supplies and software that sell for under $750, school supplies that sell for under $50, school instructional materials, and books with sales prices of under $30. (Rule 810-6-3-.65, Alabama Department of Revenue, Effective November 22, 2006)

(02/14/2007)

The IRS announced that any taxpayer who paid the long-distance telephone tax will get a refund on their 2006 federal income tax return. Recently, an Ohio Federal District Court ruled that the telephone tax no longer applied to the charges for long distance as the imposition of the tax was originally based on the duration of the call, a method of billing which is no longer widely used. As a result, the IRS is providing a refund to everyone filing a 2006 return in the form of a credit on their 1040. The standard amounts are $30 for a taxpayer filing a return with one exemption, $40 for two exemptions, $50 for three exemptions and $60 for four exemptions or more. Businesses and nonprofit organizations are also eligible for a refund, but must file a claim for the exact amount of tax paid from February 28, 2003 up to August 1, 2006 using form 8913. (IR-2006-137)

(02/09/2007)

Effective April 4, 2006, Alabama amended certain provisions of the Utility Gross Receipts Tax and the Utility Service Use Tax by providing rules regarding the sourcing of gross receipts and gross sales for public utilities that provide telegraph or telephone services. For example, the sale of telephone service sold on a call-by-call basis may either be sourced to a) each level of a taxing jurisdiction where the call originates and terminates in the jurisdiction or b) at each level of a taxing jurisdiction where the call either originates or terminates and in which the service address is also located. In addition, the law provides definitions relating to the sourcing of telegraph or telephone services. (2006 AL S 316)

(08/28/2006)

See attached link for chart:

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(07/19/2006)

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