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Beginning with the November 2002 state and local returns, the option became available for Alabama taxpayers to file the state's sales, use, rental, lodging, and income tax withholding returns online using the DOR website. There is no charge for this service used to prepare, file, and pay the taxes. (State Activity Update -- January 2003)


In Alabama, any service which assists people with recording programs for later use, pauses or records live broadcasts, programs personal settings for viewing, and/or allows reception of special content through a personal television is exempt from state sales and use tax. These services, as described, do not fall within the description of taxable amusement or entertainment services. Also, direct-to-home television service fees are exempt from local taxes as set out in the Federal Telecommunications Act of 1986. (Revenue Ruling No. 02-002, Alabama Department of Revenue, July 3, 2002)


The Alabama Supreme Court will not hear the case of Yelverton’s, Inc. v. Jefferson County, which allows the opinion of the Court of Civil Appeals to stand. The taxpayer in this case was found not to have nexus in Jefferson County, and was therefore not required to collect and remit local sales tax for that locally administered jurisdiction. Yelverton’s, a retailer located in Walker County, did not charge local tax for sales shipped into Jefferson County as they did not feel they met nexus requirements for doing so. Jefferson County felt they could interpret substantial nexus differently than the state, and that Yelverton’s had indeed met their nexus requirements. The Court of Civil Appeals had sided with the taxpayer by deciding that while local jurisdictions could issue their own regulations, those regulations should not be too dissimilar from the state’s laws. (Yelverton’s Inc. v. Jefferson County, Court of Civil Appeals of Alabama, No. 2951320, 5/9/97)



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