Weekly BNA Insights: The Challenge to Alabama’s Economic Nexus Statute and Regulation—The Details and the Procedure


From the Weekly State Tax Report:

“We now have our court case,” Alabama Commissioner of Revenue Julie Magee proudly announced on June 14 at the annual meeting of the Federation of Tax Administrators in Baltimore, Maryland, referring to an appeal filed in the Alabama Tax Tribunal by Newegg, Inc., a California-based online retailer of computer software and related items (Newegg, Inc. v Ala. Dep't of Revenue, Ala. Tax Tribunal, No. S. 16-613, appeal filed 6/8/16).

Unfortunately, the appeals process in Alabama could require as many as four stops along the way, beginning with the discovery process, hearing(s), post-hearing briefs, etc. and the eventual ruling by the Alabama Tax Tribunal.

In the meantime, many online and catalog vendors with customers in Alabama are taking a wait-and-see approach with this litigation. Others, however—approximately 50 so far according to the ADOR as of July 18—have taken advantage of the agency’s special voluntary disclosure program, including most recently Amazon.com and Overstock.com.

Bruce P. Ely, Co-Chair of the State and Local Tax Practice Group and a partner in the Birmingham, Alabama office of the multistate law firm of Bradley Arant Boult Cummings LLP, discusses Newegg v. Alabama Department of Revenue, the case challenging Alabama's economic nexus statute and how it might wind its way to the U.S. Supreme Court in this week’s BNA Insights article, available here. Or sign up for a free trial to the Weekly State Tax Report.

Compiled by Chreasea Dickerson