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S.A.L.T. Select Developments: Alabama

Baker Donelson's S.A.L.T. Select Developments will identify important state and local tax developments from Alabama.

Overview

State and local taxes impact almost every taxpayer. S.A.L.T developments in any one jurisdiction can be frequent and sometimes confusing. Where multiple jurisdictions are involved, staying current with state and local tax developments can be overwhelming for any taxpayer.

To assist you with staying current on a periodic basis, Baker Donelson's S.A.L.T. Select Developments will identify one or more recent state and local tax developments from Alabama.

October 2019

Sales Tax: Under the Alabama Simplified Sellers Use Tax Remittance Act, eligible remote sellers can collect, report and remit a flat eight percent sellers use tax, regardless of the actual combined state, county and local tax rate that might otherwise be applicable. The regulations under the Simplified Sellers Use Tax have recently been amended to expand the ways a remote seller can inform a purchaser that the tax had been collected and was to be remitted on the purchaser's behalf to include confirmation by email, a notice on a seller's website or other means approved by the Department of Revenue to provide reasonable notice to the customer. Click here for more information on the foregoing amendment.

September 2019

Business Income Tax: On September 4, 2019, the Alabama Department of Revenue announced that it is providing relief from late-filing penalties for certain corporate taxpayers who are encountering difficulties meeting October state filing deadlines for Alabama corporate income tax returns while trying to also file their federal returns by the October federal deadline. The Department cited as the reason for such relief as taxpayer challenges in compliance resulting from the complexity associated with the continued implementation of the Tax Cuts and Jobs Act.

Relief is not automatic, however. Requests for relief must be submitted in writing and will be considered on a case-by-case basis. The Department will consider whether the circumstances described by taxpayers sufficiently establish reasonable cause to grant penalty relief for late filing. Affected returns must be filed by November 15, 2019. Refer to the Department's press release for more details.

August 2019

Online Filing Option for Local Fuel Excise Taxes: To help alleviate compliance burdens for local fuel excise taxes, beginning September 3, 2019, taxpayers who are required to file and remit payment for local gasoline and diesel fuel excise taxes may gain access to a new online service provided by the Alabama Department of Revenue: the voluntary Motor Fuel Single Point System. Any local gasoline and diesel fuel excise taxpayer that would like to use the voluntary system must register for a Motor Fuel Single Point account. Account registration begins in September and taxpayers will be able to use the system to file returns and remit payments beginning November 1, 2019.

July 2019

Sales Tax: The Alabama Department of Revenue announced on June 19, 2019 that it is undertaking a review of its sales tax regulations regarding the taxability of computer software in light of the recent decision of the Alabama Supreme Court in Ex parte Russell County Community Hospital, LLC, decided on May 17, 2019. This case concludes that software is taxable under the Alabama sales tax, but also states that payments for the separately stated services that may attend the sale of software are not taxable.

June 2019

Incentives: On June 6, 2019, the Alabama Incentives Modernization Act was enacted. The Act updates the existing tax incentive regime for rural portions of the state by extending benefits to rural projects generating at least five jobs and extending the investment tax credit under the Alabama Jobs Act to 15 years without qualification. The Act also allows banks and insurance companies to purchase and use tax credits created under the Alabama Jobs Act; enhances the incentives available to high-tech companies under the Alabama Jobs Act to companies creating at least five jobs and allows the investment tax credit calculation to include operating costs as well as capital costs; and provides for reductions in capital gain taxes for investments in opportunity zone funds investing predominantly in Alabama in a manner similar to federal opportunity zones.

For more information about state and local tax developments in Alabama, please contact:

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