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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 Organization > Custom Tax Rules > Import.
      • Download and save this 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 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:
    • All Alabama local jurisdictions deselected
    • Alabama tax type set to Sales or Sellers Use Tax
  • Lastly, if any transactions were created prior to implementing these changes, they will need to be recalculated on.
    • 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 the Admin Console, go to the Transactions tab, search for your transactions, and click on the DocCode
      • Click Edit
      • Click Calculate Tax (at left)
      • Select an Adjustment Reason to the right of the Details tab
      • Click Save as Committed
    • 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 Tools Import

 

If you are registered as a Simplified Sellers Use Tax filer

Once the above changes have been made, please contact Support to have our Compliance team add the AL 2630, Simplified Sellers Use Tax form, to your returns. Because this is an optional program, designed for parties that do not have nexus with Alabama jurisdictions, we do not make this form available for all customers.

  • Please contact Support and provide the following information, so that this filing calendar can be added to your AvaTax account:
    • 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 will also need to confirm that your company name and address listed in your company details on the Organization tab of AvaTax are accurate.
  • Participating qualified sellers can also file online through Alabama MAT if they prefer

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).