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How do I use Alabama’s Simplified Seller Use Tax Remittance Act?

Overview

I would like to collect 8% in Alabama per the Simplified Seller Use Tax Remittance Act effective October 1, 2015. More information can be found on Avalara's blog.

 

Environment

Avalara AvaTax

Alabama

Resolution

Setting up AvaTax for accurate calculation

  • In order to honor the 8% flat rate, a rate override rule would need to be created for Alabama.
    • For information on creating custom tax rules in your AvaTax account, please review Add or Import Custom Tax Rules
      • Please have an Admin User log into the Admin Console and go to Settings Manage advanced company settings > Manage custom taxability > Import your tax rule.
      • Download and save the Alabama custom rule template: Rules-AL-Flat8.xls
      • Open the file and adjust the start date to align with the date you began participating in the SSUT program.
      • Browse and upload or drag and drop the Alabama custom rule template that you previously saved.
  • Next, because Simplified Sellers Use Tax is applied at the state level only and local jurisdictions are not collected, the nexus selections in your AvaTax account need:
  • Lastly, if any transactions were created prior to implementing these changes, they will need to be recalculated.
    • This will update the state rate to 8% and remove any localities that previously were used in calculation.
      • Please note this may change the amount of tax that was originally calculated on the transaction
    • To recalculate on an individual transaction
      • In AvaTax Update, go to the Transactions tab, search for your transactions, and click on the DocCode
      • Click on the transaction
      • Click Calculate Tax (in the middle)
      • Click Save
      • Select an Adjustment Reason
      • Click Yes, save and commit changes
    • To recalculate on several transaction at once using the transaction import
      • Review the import guidelines found here.
        • Use process code 4 to adjust a transaction that was already created and to allow AvaTax to calculate the new tax amount
      • Import your new file by going to Transactions > Import Transactions.

 

If you are registered as a Simplified Sellers Use Tax filer

Once the above changes have been made, please add the AL 2630 Simplified Sellers Use Tax form to your scheduled returns in AvaTax. 

  • You will need:
    • E-file credentials needed to log into the state electronically file your return
    • Filing frequency
    • Your Alabama registration number/account number
    • Your company EIN/FEIN
    • Effective Date for the first period you would like the form filed on

 

You have not yet registered as a Simplified Sellers Use Tax filer

If you have not yet registered, please contact the Alabama Department of Revenue for more information.

  • This program requires an application to be submitted and approved by the Alabama Department of Revenue before utilizing its benefits.
  • You can also review specific Simplified Seller Use Tax Remittance Act information at the Alabama website Simplified Sellers Use Tax (SSUT).