Alabama Adopts Economic Sales and Use Tax Nexus Standards
November 19, 2015
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:
- 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
- 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.