1. Alabama Department of Revenue Mike Gamble, Deputy Commissioner Rouen Reynolds, Director of Sales Tax Division

2. AGENDA Tennessee Retail Accountability Act
Alabama Retail Accountability Act
Department Rule Changes

3. Tennessee Retail Accountability Act

4. TN: Retail Accountability Act
The Retail Accountability Program (RAP) began when legislation was passed in that required wholesalers of beer and tobacco products to file an information report electronically with the Department.
The reports allowed the review and identification of under-reporting quickly.
RAP was also designed to ensure a level playing field for businesses by protecting compliant retailers from the unfair advantage gained by non-compliant retailers who have collected the sales tax from citizens and kept it.

5. TN: Retail Accountability Program
The Role of Wholesalers
Sales tax has existed in Tennessee since Since that time, wholesalers have been required to keep records of their sales to retailers and make those records available to the Department to aid in the proper administration and collection of the tax.
Although the types of records wholesalers provide the Department has changed very little, how the records are provided has changed with technology. RAP allows the Department to review sales records from wholesalers in a more efficient way: electronically, instead of in paper form.

6. TN: Retail Accountability Program
The Role of Retailers:
The TN Retail Accountability Program does not add any requirements for retailers.
Retailers continue to file and remit their sales tax returns to the state, as they always have.
If retailers file and remit their sales taxes properly to the state, they will not be impacted by the program.

7. TN: Retail Accountability Program
Current Updates and Data:
The identification of the non-compliance has led to over $60 million in additional sales tax collections through the end of 2015.
Beginning July 25, 2016 Candy, Food and Non-Alcoholic Beverages are being reported.
Wholesalers making sales of $500,000 or more per year of candy, food and non-alcoholic beverage products must now report these sales to the Department.
While not required, wholesalers may also include non-food sales in the report if doing so is more convenient.
Information can be reported by invoice or combined into one total amount purchased by the retailer for the month or quarter being reported. .

8. Alabama Retail Accountability Act

9. Alabama Retail Accountability Act
Requires monthly reporting by wholesalers and distributors of tobacco products and beer and wine.
Each licensed beer or wine distributor shall report sales of any beer or wine made to licensees for which an exemption from sales or use tax collection was claimed at the time of the sale.
Each seller of tobacco products, selling or distributing to retailers in the state shall report sales of tobacco products for which exemptions from sales or use tax were claimed at the time of the sale.

10. Alabama Retail Accountability Act
Expands already existing reporting requirements for tobacco products, no new report will be required.
Department to provide an electronic filing mechanism for submission.
Data to be received:
Seller’s legal name and address, FEIN or SSN
Seller’s beverage license
Retailer’s name and address, FEIN or SSN
Total amount sold per reporting period
Applicable resale number
Invoice period and invoice date

11. Alabama Retail Accountability Act
Penalty Provisions:
1st violation – written notice from department advising of non-compliance and penalties.
2nd violation – penalty not to exceed $500.
3rd (+) violation – penalty not to exceed $1000.
Department shall not initiate automated assessments or audits based solely on data provided in informational reports.
Wholesale and Distributor Reporting Advisory Group formed:
To make recommendations regarding the reporting of the informational reports.
Representatives from state and local government, industry and retail community.

12. 2016 Department Rule Changes
Sales and Use Tax

13. ADOR Rule Changes
: Oxygen and Durable Medical Equipment Dispensed to Medicare Recipients by Participating Providers
Effective Date: April 23, 2016
Overview: Amended
Amended to clarify and add guidance for sales to doctors’ offices that provide DME to their patients and for sales to hospitals.
: Simplified Sellers Use Tax Remittance Program
Provide guidance for out-of-state sellers.
Provides terms, requirements of program, and distribution of proceeds.

14. ADOR Rule Changes
: Requirements for Certain Out-of-State Sellers Making Significant Sales into Alabama
Effective Date: October 13, 2016
Overview: Adopted
Out-of-State sellers who lack an Alabama physical present but who are making retail sales of TPP into the state have a substantial economic presence in Alabama for sales and use tax purposes and are required to register for a license with the Department and to collect and remit tax when:
Seller’s retail sales of TPP sold into state exceed $250,000 per year based on previous calendar year sales
Seller conducts one or more of the activities described in Section (Use Tax)
Sellers may satisfy requirements above by one of the following:
Using the collecting, reporting and remitting provisions of Section (Sales Tax)
Using the collecting, reporting and remitting provisions of SSUT
Applies to transactions occurring on or after January 1, 2016

15. ADOR Rule Changes 810-6-3-.47: Poultry Products
Effective Date: October 13, 2016
Overview: Adopted
Baby chicks, broilers, eggs, and other poultry products are exempted when sold by the producer, members of his family, or persons employed by him to aid in the production, and when produced in a rural area on premises which include cultivated areas in connection with production.
: Sales to the Post Office
Quasi-independent governmental agency and is, therefore, exempt from state taxation.
Sales of items to the post office would be exempt from state sales and use taxes.
Public Law No “There is established as an independent establishment of the Executive Branch of the Government of the United States, the United States Postal Service”.

16. ADOR Rule Changes
: Informational Report for Entities Having a Statutory Exemption from the Payment of Sales, Use, and Lodgings Taxes
Effective Date: November 14, 2016
Overview: Amended
Amendment to rule clarified sales tax license will not be issued to statutorily
exempt entities.

17. Questions? Mike Gamble 334-242-1380 mike.gamble@revenue.alabama.gov
Rouen Reynolds