Sales Tax Updates in Alabama

Tax Professionals' Resource
December 22, 2012 — 1,502 views  
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The state sales and use tax rates in Alabama remain unchanged. They are as follows:

• General sale items of tangible personal property 4 percent;
• Automotive Sales 2 percent;
• Manufacturing and Machinery 1.5 percent;
• Vending sales of food items for human consumption 3 percent;
• Vending sales of other items 4 percent;
• Amusement 4 percent;
• Auto rental 1.5 percent;
• Clothing rental 2 percent;
• All other rental 4 percent

In other new items on the state level, prescribed diabetic supplies are now exempt from state and local sales tax, as well as use tax. The new exemption went into effect on August 1, 2012 and vendors selling such items were notified by the Department of Revenue.

The 9-1-1 prepaid wireless charge is now $.70. In addition, Tobacco retailers are now required to file their Monthly State Tobacco Tax Return and Monthly County Tobacco Tax Return online.

Local Sales Tax Changes

There are a number of local level sales tax changes to be aware of:

• The City of Mobile has increased its sales tax from 4 percent to 5 percent. The new rate applies to vending food sales, amusement and entertainment admissions, rental of automobiles, garments and linens, as well as general items;
• Dallas County increased the general sales tax rate from 1 percent to 1.5 percent. It applies to food vending sales, general merchandise, and amusement and entertainment admissions. Farm machinery sales increased from 0.250 percent to 0.375 percent. Manufacturing machinery sales increased from 0.750 percent to 1.125 percent. The net sales of vehicles, trailers, semi-trailers and house trailers increased from 2 percent to 2.25 percent, based on the difference of sale and cost of the item;
• The City of Skyline has opted to use Revenue Discovery Systems to collect sales and use taxes;
• The City of Brewton has increased its local sales tax to 4 percent. It applies to general merchandise sales and entertainment admissions;
• The City of Athens has increased its sales tax on general items, amusement admissions and vending machine food sales to 3 percent. It had been set at 2 percent previously.

In other news, the Alabama Streamlined Sales and Use Tax Agreement Commission have filed a preliminary report as to the methods of streamlining the administration of sales and use taxes. One of its recommendations was to make the Department of Revenue the single point of administration, with involvement from local taxing authorities.

It recommended the creation of a local advisory board consisting of members of local governments. It further recommended that local authorities retain the ability to audit taxpayers under their jurisdiction.

Tax Professionals' Resource