Alabama Adopts Economic Sales and Use Tax Nexus Standards

November 19, 2015

By David Venanzi

The Alabama Department of Revenue recently adopted Rule 810-6-2-.90.03 which establishes an economic nexus sales and use tax standard for out-of-state sellers who lack Alabama physical presence, but make substantial retail sales of tangible personal property. This rule is effective January 1, 2016. In order for an out-of-state seller to be subject to this rule, they must fulfill the following two requirements:

  1. The out-of-state seller must have retail sales of tangible personal property sold in the state that exceed $250,000 per year on the previous calendar year’s sales; and
  2. The seller must conduct one or more of the activities described in Section 40-23-68, Code of Alabama 1975. These activities include, but are not limited to:
    • Maintaining, occupying, or using, permanently or temporarily, directly or indirectly an office, place of  distribution, sales or sample room, etc.
    • Qualifying to do business or registering with the state to collect tax.
    • Soliciting, pursuant to a contract with a broadcaster or publisher located in this state, orders for tangible personal property by means of advertising which is disseminated primarily to consumers located in this state.
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