Ecommerce Retailers Forced to Pay Tax in Alabama

Ecommerce Retailers Forced to Pay Tax in Alabama

Every 30 seconds eCommerce generates more than $1.2 million. A rapidly growing and obviously lucrative industry, companies are taking advantage of eCommerce in any way they can.

According to Dothan Eagle, Alabama is trying to implement a voluntary tax program in order to receive a portion of the millions of dollars in revenue from online-only retailers. They just received help from one of the biggest players in the online game, too.

As of Nov. 1, Amazon.com will begin collecting a sellers tax through Alabama’s Simplified Use Tax Remittance Program Act of 2015. The law states that eCommerce sellers will have to pay a set 8% tax rate. The tax rate comes in lieu of local and state sales that otherwise would be paid via customer tax cost.

“We are proud to be able to offer Amazon and other remote sellers a simplified system to collect tax for both the sate and local governments,” said Julie Magee, Alabama Revenue Commissioner. “This partnership with Amazon is a huge benefit for the state and means additional, much-needed revenues, especially as Amazon continues to capture more and more of the online retail market share.”

Since the advent of the Alabama remittance act, the state has collected over $2.2 million. About 50% of that goes to state, 25% goes to Alabama cities, and 25% goes to various counties throughout the state.

BNA reports that Amazon is fed up with the way things have been going prior to the remittance act.

“As a company, Amazon has said, ‘We’re done with this, we’re tired of it,’” said Magee. “They want to put distribution centers in Alabama so they can have fast delivery of products to customers. They have to have distribution centers in the state to do that. We’re seeing that now.”

Magee added that it’s time certain organizations and industries complied with tax regulations like other businesses have been for years.

“We have state rules regulating flea markets. A flea market seller has to collect sales tax, they have to have a sales tax license with the state, city, and the county,” Magee said. “We want the eBays of the world to pay, too.”