Amazon, IKEA on List of Online Sellers Paying Alabama Tax

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Chris Marr

Alabama’s flat-rate sales tax program for out-of-state sellers has more than 100 participating companies that include Amazon.com, Overstock.com and Zappos, according to a list the state recently made public.

Alabama’s revenue department began publishing the names of sellers participating in its Simplified Seller Use Tax Remittance program under a new law that took effect July 1. The participants were previously kept confidential, although Amazon and Overstock had confirmed their participation beginning in November 2016 and May 2016, respectively.

The Alabama revenue department lists 116 entities as participating in the simplified remittance program, ranging from retail to computer software to automotive. The number includes some related corporate affiliates, such as the four different Amazon entities included on the list.

Other companies participating include Adobe Systems Inc., HSN Interactive LLC, IKEA U.S. East LLC, Mitsubishi FUSO Truck of America Inc., Pirelli Tire LLC, Simon & Schuster Digital Sales Inc., Spotify USA Inc., and Wayfair LLC.

For the first nine months of Alabama’s fiscal year (through June 30), the simplified remittance program has brought in $39.1 million, according to Frank Miles, a revenue department spokesman. This compares with $2.3 million for the same period a year ago, when only about half as many companies were participating and Amazon hadn’t begun collecting in Alabama yet.

State Strategy

The program, which began in October 2015, invites out-of-state sellers to collect and remit tax on sales to customers in Alabama at a flat rate of 8 percent—letting the sellers avoid having to comply with varying local sales tax rates for each city and county. Retail participants get to keep 2 percent of the tax collected.

The simplified remittance is one part of Alabama’s recent strategy to capture sales tax from the growing e-commerce market. The state’s revenue department also imposed a rule beginning in January 2016 that required out-of-state sellers with more than $250,000 of annual sales into the state to collect and remit sales tax, a model several other states have followed.

The Alabama regulation is tied up in a lawsuit, alongside pending litigation over similar sales tax regimes in South Dakota, Tennessee, and other states. Online retailer Newegg Inc. sued to block the Alabama regulation in a case pending before the Alabama Tax Tribunal.

To contact the reporter on this story: Chris Marr in Atlanta at cMarr@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

The list of participating out-of-state sellers is at http://src.bna.com/qCH.

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