Code of Alabama - Title 40: Revenue and Taxation - Chapter 23 - Sales and Use Taxes

• Article 1 Sales Tax.
• Division 1 General Provisions.
• Section 40-23-1 Definitions; transactions considered or not considered sales
  (a) For the purpose of this division, the following terms shall have the respective meanings ascribed by this section: (1) PERSON or COMPANY. Used interchangeably,...
• Section 40-23-2 Tax levied on gross receipts; certain sales exempt; disposition of funds
  There is levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, a privilege...
• Section 40-23-2.1 Only one municipal or county sales, etc., tax collected on same sale; payment to improper locality
  (a) If a sales tax, gross receipts tax in the nature of a sales tax, as defined in Section 40-2A-3(8), use tax, or rental tax...
• Section 40-23-3 Exclusion of certain municipal privilege license taxes
  Municipal privilege license taxes which are levied and collected by the application of a flat percentage rate of gross sales, or gross receipts from sales,...
• Section 40-23-4 Exemptions
  (a) There are exempted from the provisions of this division and from the computation of the amount of the tax levied, assessed, or payable under...
• Section 40-23-4.1 Certain drugs exempt
  (a) The term "drugs" shall include any medicine prescribed by physicians when the prescription is filled by a licensed pharmacist, or sold to the patient...
• Section 40-23-4.2 Food stamp purchases exempt
  (a) As used in this section the following terms shall have the following meanings: (1) FOOD STAMPS. The stamps provided by the United States Department...
• Section 40-23-4.3 Exemption form for certain agricultural purposes
  In connection with the purchases of tangible personal property described in subdivisions (2), (4), and (22) of subsection (a) of Section 40-23-4, and therefore exempt...
• Section 40-23-4.4 Exemption form for equipment for certain commercial fishing vessels
  In connection with the purchase of material, equipment, or machinery for commercial fishing vessels described in subdivision (13) of subsection (a) of Section 40-23-4, and...
• Section 40-23-5 Certain organizations and vendors exempt from payment of state, county, and municipal sales and use taxes
  (a) The Diabetes Trust Fund, Inc., and any of its branches or agencies, heretofore or hereafter organized and existing in good faith in the State...
• Section 40-23-6 License required to engage in business; one-time surety bond
  (a) If any person shall engage in or continue in any business for which a privilege tax is imposed by Section 40-23-2 as a condition...
• Section 40-23-6.1 Reasonable cause for suspension, revocation, etc., of license
  (a) The commissioner, subject to the appeal provisions allowed in Chapter 2A, may suspend or revoke a license, or deny a license application or renewal,...
• Section 40-23-7 Taxes due monthly; filing of reports; estimated payments authorized; election to file quarterly, semi-annually, or annually; extension of time for making return
  (a) The taxes levied under this division, except as otherwise provided in subsection (d), shall be due and payable in monthly installments on or before...
• Section 40-23-8 Cash sales and credit collections to be reported
  Any person taxable under this division, having cash and credit sales, may report such cash sales, and the taxpayer shall thereafter include in each monthly...
• Section 40-23-9 Records to be kept
  It shall be the duty of every person engaging or continuing in this state in any business for which a privilege tax is imposed by...
• Section 40-23-10 Reports under oath
  The monthly reports herein required to be made are not required to be made on oath, but wherever in this division any report is required...
• Section 40-23-11 Penalty for failure to make reports or keep records
  Any person subject to the provisions of this division who shall fail to make the reports or any of them, as herein required, or who...
• Section 40-23-12 Penalty for willful refusal to make reports or permit examination of records
  Any person subject to the provisions of this division willfully refusing to make the reports herein required, or who shall refuse to permit the examination...
• Section 40-23-24 Itinerant vendors to file bond
  For the purpose of securing the payment of any tax, penalties or interest due or which may become due under the provisions of this division,...
• Section 40-23-25 Person selling out or quitting business to file return; part of purchase money to be withheld
  Any person subject to the provisions hereof who shall sell out his business or stock of goods, or shall quit business, shall be required to...
• Section 40-23-26 Tax to be added to purchase price; refund unlawful; tax a direct tax on retail consumer
  (a) Every person, firm, corporation, association or copartnership engaged in or continuing within this state in the business for which a license or privilege tax...
• Section 40-23-27 Violator may be restrained from continuing in business
  Any taxpayer who shall violate any of the provisions of this division may be restrained from continuing in business, and the proper prosecution shall be...
• Section 40-23-28 Sales tax an additional tax
  The tax imposed by this division shall be in addition to all other licenses and taxes levied by law as a condition precedent to engaging...
• Section 40-23-30 Administration and enforcement of division; appointment, etc., of agents, etc
  The administration of this division is vested in and shall be exercised by the Department of Revenue, except as otherwise herein provided, and the enforcement...
• Section 40-23-31 Department to make rules and regulations
  The Department of Revenue shall from time to time promulgate such rules and regulations for making returns and for ascertainment, assessment and collection of the...
• Section 40-23-34 Proceeds of tax to be deposited in Treasury
  All taxes or other funds received or collected by the Department of Revenue under the provisions of this division shall be without delay deposited in...
• Section 40-23-35 Disposition of revenues from tax
  (a) Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay...
• Section 40-23-36 Discounts
  (a) The Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for the allowance of a discount,...
• Section 40-23-37 Agricultural machinery and equipment - Tax imposed; rate
  There is hereby levied, in lieu of the state sales tax levied by Section 40-23-2, a privilege or license tax against the person on account...
• Section 40-23-38 Agricultural machinery and equipment - Enforcement; application of administrative provisions of this division
  Section 40-23-37 shall be enforced by the Commissioner of Revenue and the Department of Revenue in the same way, and subject to the same rules...
• Section 40-23-39 Refund of sales taxes paid on certain property purchased in state for export to foreign country; certain passenger vehicles and trucks exempt from sales and use taxes
  (a) Notwithstanding any other provision of law, the purchaser of tangible property purchased in the state, with the intent that the property is to be...
• Division 2 Street and Highway Contractors.
• Section 40-23-50 Tax levied; collection and enforcement
  (a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected, as herein provided,...
• Article 2 Use Tax.
• Section 40-23-60 Definitions
  For the purpose of this article, the following terms shall have the respective meanings ascribed to them in this section: (1) PERSON or COMPANY. Any...
• Section 40-23-61 Property taxed; persons liable
  (a) An excise tax is hereby imposed on the storage, use or other consumption in this state of tangible personal property, not including, however, materials...
• Section 40-23-62 Exemptions
  The storage, use, or other consumption in this state of the following tangible personal property is hereby specifically exempted from the tax imposed by this...
• Section 40-23-63 Agricultural machinery or equipment - Tax imposed; rate; who liable
  There is hereby levied and imposed an excise tax on the storage, use or other consumption in this state of any machine, machinery, or equipment...
• Section 40-23-64 Agricultural machinery or equipment - Enforcement; application of administrative provisions of article
  Section 40-23-63 shall be enforced by the Commissioner of Revenue and state Department of Revenue in the same way, and subject to the same rules...
• Section 40-23-65 Credit for sales or use tax paid to another state
  If a sales or use tax equal to or greater than the amount of the Alabama tax is paid to another state under a requirement...
• Section 40-23-66 Retail sellers to register and give information
  Every seller engaged in making retail sales of tangible personal property for storage, use or other consumption in this state, who: (1) Maintains a place...
• Section 40-23-67 Seller to collect tax; seller not to assume or absorb tax
  Every such seller making sales of tangible personal property for storage, use or other consumption in this state, not exempted under the provisions of Section...
• Section 40-23-68 Seller to file returns
  (a) Except as otherwise provided in subsection (f), the tax imposed by this article shall be due and payable to the department monthly on or...
• Section 40-23-74 Extension of time for making return
  The department for good cause may extend for not to exceed 30 days the time for making any return required under the provisions of this
• Section 40-23-75 Deposit of security
  The department, whenever it deems it necessary to insure compliance with the provisions of this article, may require any person subject thereto to deposit with...
• Section 40-23-77 Discount; distribution and expenditure
  A discount of three percent of the taxes levied by this article due and payable to the state shall be allowed to the seller or...
• Section 40-23-82 Final return of retailer selling out; purchaser to retain part of purchase money
  If any retailer liable for an amount of tax herein required to be collected shall sell out his business or stock of goods or shall...
• Section 40-23-83 Records to be kept; enforcement of article; promulgation of regulations, etc
  Every seller and every person storing, using or otherwise consuming in this state tangible personal property purchased from a retailer shall keep such records, receipts,...
• Section 40-23-85 Disposition of funds derived from tax
  All taxes, fees, interest, or penalties imposed and all amounts of tax herein required to be paid to the state under this article must be...
• Section 40-23-88 Penalties
  Any seller or other person failing or refusing to furnish any return hereby required to be made, or failing or refusing to furnish a supplemental...
• Article 3 Taxes on Sale, Storage, and Use of Automotive Vehicles, Motorboats, Truck Trailers, etc.
• Section 40-23-100 Definitions
  As used in this article, unless the context otherwise requires, the following terms shall have the following meanings: (1) JUDGE OF PROBATE. The judge of...
• Section 40-23-101 Sales tax levied on automotive vehicles, motorboats, truck trailers, manufactured homes, etc.; additional receipts and taxes collected
  (a) There is hereby levied and shall be collected as herein provided a sales tax upon every person, firm, or corporation purchasing within this state,...
• Section 40-23-102 Excise tax levied on storage or use of automotive vehicles, motorboats, truck trailers, manufactured homes, etc.; additional receipts and taxes collected
  (a) There is hereby levied and shall be collected as herein provided, in lieu of the excise tax levied by subsection (c) of Section 40-23-61,...
• Section 40-23-103 Sales tax levied on sale price less credit for trade-in
  Where any used automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer is taken in trade or in a series of trades as a credit...
• Section 40-23-104 Collection of taxes before registration or licensing; proof of purchase price; proof of payment of tax
  (a) The licensing official shall collect all of the following: (1) The taxes levied by this article. (2) The municipal gross receipts or sales taxes...
• Section 40-23-105 Applicability of certain Title 40 provisions
  Except as herein otherwise provided, the tax herein shall be subject to all definitions, exceptions, exemptions, proceedings, requirements, rules, regulations, provisions, penalties, fines, punishments, deductions,...
• Section 40-23-106 Reciprocity
  If a sales or use tax equal to or in excess of the amount of the tax imposed by this article is paid to another...
• Section 40-23-107 Fees
  For making the collection of taxes levied under authority of this article, the licensing official shall be entitled to a fee in an amount equal...
• Section 40-23-108 Disposition of funds
  The licensing official shall, after the deduction of the fee as provided in Section 40-23-107, remit the revenue collected hereunder to the Department of Revenue...
• Section 40-23-110 Penalty for failure to pay tax
  Any person failing to pay the tax levied under the provisions of this article shall be guilty of a Class C misdemeanor and upon conviction...
• Section 40-23-111 Authority to adopt and enforce rules and regulations
  The Department of Revenue is authorized to adopt, promulgate, and enforce reasonable rules and regulations relating to the administration and enforcement of Article 3, commencing...
• Article 4 Violation of Tax Exempt Privilege.
• Section 40-23-120 Good faith violations
  Any law to the contrary notwithstanding, any retailer, who relies in good faith on any state sales tax exemption number that has been authorized by...
• Section 40-23-121 Authorization to collect or recover sales taxes due on illegal purchases
  The state Revenue Department is authorized to use its powers and responsibilities, in accord with the general laws of this state, to collect or recover...
• Article 5 Taxes on Sale of Gasoline and Motor Fuel.
• Section 40-23-130 Calculation of municipal or county gross receipts tax
  Any gross receipts tax imposed by a municipality or county on the sale of gasoline and motor fuel shall be based on the gross receipts...
• Article 6 Tax on Remote Sellers.
• Division 1 Application and Implementation.
• Section 40-23-150 Education Trust Fund Rainy Day Account
  Repealed by Act 2012-599, 1st Sp. Sess., §2, effective October 1, 2012.
• Division 2 Delegation to Discuss Sales and Use Tax Collection From Remote Sales.
• Section 40-23-170 Legislative findings
  The Legislature finds that the State of Alabama should participate in negotiations with other states to simplify and modernize tax administration in order to substantially...
• Section 40-23-171 Definitions
  As used in this division, the following terms shall have the following meanings: (1) AGREEMENT. An interstate agreement for simplification and uniformity of taxation among...
• Section 40-23-172 Delegates for participation in multistate discussions
  (a) There is created a delegation to participate in multistate discussions regarding the simplification and modernization of tax administration. Delegates shall be appointed as follows:...
• Section 40-23-173 Duties of delegates; agreement
  (a) Delegates shall enter into multistate discussions on behalf of the State of Alabama to consider whether the state should enter into an agreement with...
• Section 40-23-174 Distribution of proceeds
  (a) Should the enactment of a national agreement for the collection of sales and use taxes from remote sellers establish a single national tax rate...
• Division 3 Conditions for Remote Entity Nexus.
• Part 1
• Section 40-23-190 Conditions for Remote Entity Nexus
  (a) An out-of-state vendor has substantial nexus with this state for the collection of both state and local use tax if: (1) The out-of-state vendor...
• Part 2 Simplified Seller Use Tax Remittance Act.
• Section 40-23-191 Short title; definitions
  (a) This part shall be titled The Simplified Seller Use Tax Remittance Act. (b) For the purpose of this part, the following terms shall have...
• Section 40-23-192 Simplified Sellers Use Tax Remittance Program
  (a) There is hereby established The Simplified Sellers Use Tax Remittance Program designed to allow an eligible seller who participates in the program to collect,...
• Section 40-23-193 Collection and remittance of simplified sellers use tax; reporting; statement
  (a) The simplified sellers use tax due under the program is eight percent of the sales price on any tangible personal property sold or delivered...
• Section 40-23-194 Discount
  Eligible sellers may deduct and retain a discount equal to two percent of the simplified sellers use tax properly collected and then remitted to the...
• Section 40-23-195 Rulemaking authority; recordkeeping
  (a) The department may adopt, promulgate, and enforce reasonable rules and regulations related to the implementation, administration, and participation in the program. The department shall...
• Section 40-23-196 Refund or credit of excess taxes paid
  (a) Any taxpayer who pays a simplified sellers use tax through this program that is higher than the actual state and local sales or use...
• Section 40-23-197 Disposition of funds
  (a) The proceeds of simplified sellers use tax paid pursuant to this part shall be appropriated to the department, which shall retain the amount necessary...
• Section 40-23-197.1 Distributions of simplified sellers use tax proceeds
  Notwithstanding the provisions of Section 40-23-197, the department may initiate monthly distributions of the proceeds from the simplified sellers use tax paid to counties and
• Section 40-23-198 Applicability of Part 2
  In the event that the enactment of federal legislation removes current federal limitations on states' ability to enforce their sales and use tax jurisdiction against...
• Section 40-23-199 Amnesty for certain uncollected remote use tax
  (a) Subject to the limitations set out in this section, an eligible seller participating in the program shall be granted amnesty for any uncollected remote...
• Section 40-23-199.1 Amnesty for certain uncollected remote use tax
  The Simplified Sellers Use Tax Remittance Program may not be used to report sales tax obligations subject to the sales tax imposed by Chapter 23...
• Section 40-23-199.2 Marketplace facilitators
  (a) For the purpose of this Act 2018-539, the following terms shall have the respective meanings ascribed to them: (1) DEPARTMENT. The Alabama Department of...
• Section 40-23-199.3 Online application process
  By no later than January 1, 2019, the department shall initiate an online application process to simplify refunds requested pursuant to Section 40-23-196.
• Division 4 Alabama Streamlined Sales and Use Tax Commission.
• Section 40-23-200 Definitions
  For purposes of this division, the following words or phrases shall have the following meanings: (1) AGREEMENT. The Streamlined Sales and Use Tax Agreement. (2)...
• Section 40-23-201 Creation; composition; meetings
  (a) There is hereby established the Alabama Streamlined Sales and Use Tax Commission, created to identify, develop, implement, and administer the procedures and programs the...
• Section 40-23-202 Duties
  The duties of the commission shall include identification and development of each of the following as necessary for compliance with the Streamlined Sales and Use...
• Section 40-23-203 Report; implementation and administration of recommendations
  (a) The commission shall make a preliminary written report of its recommended implementation plan regarding necessary systems and programs within three months of the initial...
• Section 40-23-204 Recommended changes in existing tax laws
  (a) In addition to the duties set out in Section 40-23-202, the commission shall research Alabama's existing tax laws to identify what changes in existing...
• Section 40-23-205 Funding
  The Legislature shall appropriate such funds from the general funds of the State of Alabama as necessary for the reasonable and necessary expenses of the...
• Article 7 School Items Annual Sales Tax Holiday.
• Section 40-23-210 Definitions
  As used in this article, the term "covered items" means the following: (1) Articles of clothing with a sales price of one hundred dollars ($100),...
• Section 40-23-211 Tax exemption on covered items
  Covered items, as defined herein, are exempted from paying the state sales and use tax during the period from 12:01 a.m. on the third Friday...
• Section 40-23-212 Rules and regulations
  The Commissioner of the Department of Revenue shall promulgate any rules necessary to implement and administer this article including, but not limited to, a list...
• Section 40-23-213 County and municipal exemptions authorized
  Any county or municipality may, by resolution or ordinance adopted at least 30 days prior to the third full weekend of July, provide for the...
• Article 8 Severe Weather Preparedness Tax Holiday.
• Section 40-23-230 Definitions
  (a) As used in this article, the term covered items includes the following selling for $60 or less per item: (1) Any package of AAA-cell,...
• Section 40-23-231 Tax exemption on covered items
  Purchases of covered items, as defined herein, are exempted from the state sales and use tax during the period from 12:01 a.m. on the first...
• Section 40-23-232 Rules and regulations
  The Commissioner of the Department of Revenue shall promulgate any rules necessary to implement and administer this article including, but not limited to, a list...
• Section 40-23-233 County and municipal exemptions authorized
  Any county or municipality may, by resolution or ordinance adopted at least 14 days prior to the first full weekend of July in 2012 and...
• Article 9 Optional Network Election for Single Point Online Transactions.
• Section 40-23-240 Development and implementation of system
  (a) No later than September 30, 2013, the Department of Revenue shall develop and make available a system which allows any taxpayer required to file...
• Section 40-23-241 Authorization of system; jurisdictional requirements; use by taxpayers; penalties and interest
  (a) All Alabama taxing jurisdictions shall authorize utilization of the ONE SPOT system for any taxpayer required to file a state or local sales or...
• Section 40-23-242 State and Local Advisory Committee
  (a)(1) To ensure that local taxing jurisdictions have meaningful input into the development and operation of ONE SPOT, a State and Local Advisory Committee is...
• Section 40-23-243 Construction of article
  Nothing in this article shall be construed to authorize the Department of Revenue to impose fees on the local taxing jurisdictions or their designees for...
• Section 40-23-244 Uniform due date for eligible taxes
  Notwithstanding any other provisions of law, the due date for any taxes which are eligible to be filed through the ONE SPOT system set out...
• Article 10 Wholesale to Retail Accountability Program
• Section 40-23-260 Program established; definitions; informational reports; Wholesale and Distributor Reporting Advisory Group
  (a) This article shall establish the Wholesale to Retail Accountability Program or "WRAP". (b) For the purpose of this article, the following words shall have...
• Section 40-23-261 Filing of duplicate information returns
  (a) The department is authorized to require that every payment settlement entity, third party settlement organization, electronic payment facilitator, or other third party acting on...
• Section 40-23-262 Submission of information on municipal business privilege license applications
  (a) Information on all municipal business privilege license applications for new licenses and renewals issued on or after October 1, 2019, shall be electronically transmitted...
• Section 40-23-263 Construction of Section 40-23-260
  Section 40-23-260 is limited to the reporting of certain information to the Department of Revenue and shall not be construed as limiting or changing the...

Last modified: May 3, 2021