Alabama has initiated a number of sales tax changes, including the new ONE SPOT system a few months back. Our software works with ONE SPOT to make filing easier, allowing you to finish in an hour or less on average. But if you’re also not aware of new sales tax changes in the way Nexus works in Alabama, you’re in for a surprise. The new law that changes nexus to a more common standard definition of nexus goes into effect on January 1. If you do business in Alabama or plan on doing business there, be sure you’re up on the latest nexus rules. The new sales tax code 810-6-5-.04.02 outlines that the local sales tax nexus works the same way as the statewide sales tax nexus in Alabama. This law replaces 810-6-3-.51.
The law now specifically applies what would have originally only created state nexus, resulting in a collection of state sales tax, to local sales tax. For instance, if you are an out-of-state business selling to a customer in Alabama and have collected Alabama sales tax in the past, you likely now need to collect any applicable local sales tax too. The new law instructs businesses to use 810-6-2-.90.01’s list of nexus-creating actions to determine their nexus situation. Be sure to read through the new law and the situations when nexus is created to ensure your business is complying with the new rule. While it became law in November, it doesn’t go into effect until January 1, so you’ve got a bit of time to get your nexus issues sorted out if you do business in Alabama.
With ONE SPOT, it was only a matter of time before municipalities started asking for the state to force businesses to collect their sales tax. Before, when you had to remit to each individual local sales tax jurisdiction instead of one place—making it nearly impossible to manage and impossible to enforce on a large scale. With ONE SPOT, your business has a much easier job of dealing with local sales tax but that also means it’s easier for auditors to initiate an inspection of your business and sales tax filings. Make sure that your sales tax processes are ready to meet the new nexus standards in Alabama and keep up with your filings.