Alabama Adopts Economic Sales and Use Tax Nexus Standards

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.

For more information, please click here to view the new rule.

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