Alabama Issues Guidance on Simplified Sellers Use Tax & Marketplace Facilitators
Alabama recently changed its guidance surrounding simplified sellers use tax and marketplace facilitators. Alabama put in place a marketplace facilitator law on January 1, 2019, defining a marketplace facilitator as an entity that has met the $250,000 qualifying amount in retail sales. Marketplace facilitators are now required to apply and register for a simplified sellers use tax account. The simplified sellers use tax 8 percent flat tax should be collected and remitted on all retail sales of products sold in Alabama through the marketplace facilitator’s platform.
The collection and remittance of the 8 percent simplified sellers use tax relieves the marketplace facilitator, marketplace seller, and purchaser from any additional state or local sales and use taxes on the same transactions made through the marketplace. Marketplace sellers are not relieved of their obligation under the laws of this state to remit sales or use taxes on sales through the business’s own electronic sales platforms or at the business’s retail locations in this state.
Based on the guidance provided, a qualified marketplace facilitator is now required to apply and register for a simplified sellers use tax account. Applications should be submitted no later than October 1, 2021.
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