Stay up to date with sales tax: Join our mailing list!

Under current Alabama law interpretations, two companies can be owned by the same parent company and be treated as two separate companies for sales and use tax collection responsibilities. One company having nexus in Alabama does not require that another company owned by the same parent company automatically have nexus within the state. If the two companies truly operate independently of each other, each company will be evaluated separately to determine if they have nexus in Alabama. (Revenue Ruling No. 03-001, August 4, 2003.)


In Alabama, the purchase of oil rollers and toner cartridges was exempt from sales tax. It was determined that the oil from the oil rollers and the toner from the toner cartridges were exempt component parts of printed material produced for sale. (Alabama Department of Revenue and Administrative Law Division, Docket No. S. 03-298, decided October 3, 2003)


Taxes that must now be filed electronically are State Sales, Use, Rental, or Leasing, Lodgings, Utility Gross Receipts, Utility Service Use, Mobile Telecommunications Service, Contractor's Gross Receipts, Pharmaceutical Providers, Alabama Nursing Home Privilege and State Administered Local Sales, Use, Rental, or leasing and Lodgings Taxes. Taxpayers are expected to use an electronic filing system available over the Internet. As an alternative, taxpayers can use the department's Telephone Voice Response system. A waiver may be obtained from the Tax Commissioner to file in another way in special circumstances only. (Reg. 810-1-6-.12, September 22, 2003.)


Effective August 1, 2003, in Alabama, an out-of-state vendor establishes nexus for state and local use tax purposes if that vendor and an in-state business with one or more Alabama locations are related parties and (1) share the use of a name (or use a substantially similar name), trademark, trade name, or goodwill to develop, promote, or maintain sales, (2) provide payments for service to each other either for all or part of the volume or value of sales, (3) share or coordinate business plans, or (4) if services related to developing, promoting, or maintaining the in-state market are provided to the out-of-state business by the in-state business. (Ch. 390, H.B. 650, Laws 2003, effected as noted above)


Many panelists and lawmakers have been in discussions recently to decide what the implications of trying to establish an Internet tax will have on electronic commerce. A push for the enactment of the Internet Nondiscrimination Act (H.R. 49) has been started as there is some concern that imposing an internet tax could hinder the use of the internet for commerce purposes. The Internet Tax Freedom Act, set in motion in 1998, will expire in November of 2003 and with the Nondiscrimination Act, there is an interest in preventing unfair tax treatment of Internet sales, not necessarily preventing the online sales tax as a whole. (House Judiciary Subcommittee on Commercial and Administrative Law Hearing, Washington, April 1, 2003, and interview with Harley T. Duncan following hearing.)



Scroll to Top