Alabama has amended provisions relating to the administration and collection of local sales, use, rental, and lodging taxes. Beginning March 1, 2018, any taxpayer collecting sales, use, rental, or lodgings tax in compliance with the tax rates published by the Alabama Department of Revenue (DOR) will be relieved from liability to Alabama and its local jurisdictions for having charged and collected an insufficient rate based upon the rate published by the DOR. If the rate published by the DOR and relied upon by the taxpayer is less than the actual rate provided on the return confirmation provided to the county or municipality, the DOR will be responsible to the local jurisdiction for reimbursement of the amount due as a result of the difference. The liability is only applicable for a period not to exceed one year from the date the incorrect rate was published by the DOR. Notwithstanding the preceding requirement, if a county or municipality fails to properly notify the DOR of a new levy or amendment to an existing levy, the DOR will be relieved from liability to the local jurisdiction for a taxpayer having charged and collected an insufficient amount of tax based upon the rates published by the DOR. The legislation also requires local taxing jurisdictions to notify the ADOR at least 60 days (previously 30 days) in advance of implementing a tax change. No interest or penalty can be assessed against a taxpayer for a rate change until the rate change has been on file with the ADOR for at least 60 days.
The legislation also states that the DOR may not charge a fee to a local municipality for the cost of filing, payment processing, and remittance services relating to any tax authorized to be filed under the ONE SPOT system of the DOR.
The legislation also lowers the cap on costs the DOR can charge to a county for collecting and administering the county’s taxes from 5% to 2% of the amount collected. (Alabama Act 2018-150 (S.B. 111))