Revenue Chapter 810‑6‑4
ALABAMA DEPARTMENT OF REVENUE
ADMINISTRATIVE CODE
CHAPTER 810‑6‑4
SALES TAX DUE MONTHLY; FILING OF REPORTS;
RECORDS REQUIRED; REFUNDS; INTEREST;
HEARINGS ON ASSESSMENTS; EXAMINATIONS OF
RETURNS; INTER ALIA
TABLE OF CONTENTS
810‑6‑4‑.01 Accounts Charged Off (Bad Debts) And Repossessions
810‑6‑4‑.02 Amounts Of Sales Tax To Be Collected On Admissions (Repealed 7/9/98)
810‑6‑4‑.02.05 Consigned Property
810‑6‑4‑.03 Discounts Allowed On Payments Of Sales Tax Made Before Delinquency
810‑6‑4‑.04 Extension Of Time For Filing Return
810‑6‑4‑.05 Failure Of Vending Machine Operator To Collect Does Not Relieve Him Of Payment (Repealed 7/30/98)
810‑6‑4‑.06 Failure Of Seller To Collect Tax
810‑6‑4‑.07 Farm Machines, Machinery, And Equipment
810‑6‑4‑.07.05 Federal Excise Tax On Certain Trucks And Trailers, Retailers
810‑6‑4‑.08 Conference On Assessments (Formerly Titled Hearing On Assessments (Repealed May 22, 1993)
810‑6‑4‑.09 Interest On Overpayments Of Sales And Use Taxes (Repealed March 24, 1993)
810‑6‑4‑.10 Keeping Records Of Sales For Resale (Formerly Regulation L)
810‑6‑4‑.11 Leased Departments, Filing Tax Returns For
810‑6‑4‑.13 Permit Issued To Electric Cooperatives, Telephone Companies And Others
810‑6‑4‑.14 Sales And Use Tax Direct Pay Permit
810‑6‑4‑.15 Permit To Pay Sales And Use Taxes On Motor Fuels Direct To The Department Of Revenue
810‑6‑4‑.16 Petition For Refund Of Sales Taxes (Repealed March 24, 1993)
810‑6‑4‑.17.01 Procedure To Be Followed By Municipalities And Counties In Obtaining Sales Tax Information (Repealed September 25, 1992)
810‑6‑4‑.17.05 Processing, Definition
810‑6‑4‑.18 Refunds Of Excess Payments Shown On Returns (Repealed)
810‑6‑4‑.19 State Sales Tax Returns Required From All Retail Vendors And Annual Schedule Of Locations Required From All Retail Vendors With Multiple Locations
810‑6‑4‑.20 Seller Must Collect And Pay Tax Due
810‑6‑4‑.21 Reporting And Paying Sales Or Sellers Use Tax On Collections Of Accounts Receivable On the Seller’s Books At The Time Of A Rate Increase
810-6-2-.21.01 Determining The Applicable Law Levy Or Tax Rate When An Existing Sales Or Use Tax Levy Is Replaced Or Amended
810‑6‑4‑.22 Abatement Of The Sales And Use Tax Liability On Private Use Industrial Development Property
810‑6‑4‑.23 Application For The Abatement Of The Sales And Use Tax Liability Of The Private User Of Private Use Property To Which A Public Authority, County, Or Municipal Government Has Title Or A Possessory Right
810‑6‑4‑.24 Copy Of Abatement Agreement To Be Filed With The Revenue Department And The Procedures Governing The Use Of Direct Pay Permits Or Exemption Certificates By Private Users And Contractors
810‑6‑4‑.24.01 Sales And Use Tax Certificate Of Exemption For An Industrial Or Research Enterprise Project (Form STE‑2) ‑ Responsibilities Of The Certificate Holder ‑ Burden Of Proof ‑ Liability For Taxes Later Determined To Be Due
810‑6‑4‑.25 Taxability Of The Private User Of Private Use Property To Which A Public Authority, County, Or Municipal Government Has Title Or A Possessory Right
Appendix A
Appendix B
Appendix C
Appendix D
810‑6‑4‑.01 Accounts Charged Off (Bad Debts) And Repossessions.
(1) The term "bad debt or uncollectible account" as used in this rule shall mean any portion of the sales price of a taxable item which the retailer cannot collect. Bad debts include, but are not limited to, worthless checks, worthless credit card payments, and uncollectible credit accounts. Bad debts, for sales and use tax purposes, do not include finance charges, interest, or any other nontaxable charges associated with the original sales contract, or expenses incurred in attempting to collect any debt, debts sold or assigned to third parties for collection, or repossessed property.
(2) The term "repossessions" as used in this rule shall mean the repossession of taxable items from the purchaser by the retailer because of the purchaser's default in the payment of the amount owed.
(3) The term "credit sale" shall include all sales in which the terms of the sale provide for deferred payments of the purchase price. Credit sales include installment sales, conditional sales contracts, and revolving credit accounts.
(4) Sections 40‑23‑8 and 40‑23‑68(e), Code of Ala. 1975, require that any person taxable under the law having cash and credit sales may report the cash sales, and the retailer shall include in each report all credit collections made during the preceding tax reporting period and shall pay the taxes due on the cash sales and the credit collections at the time of filing the tax report, but in no event shall the gross proceeds of credit sales be included in the measure of tax to be paid until collections of the credit sales have been made.
(5) In the event a retailer reports and pays the sales or use tax on credit accounts which are later determined to be uncollectible, the retailer may take a credit on a subsequent tax report or obtain a refund for any tax paid with respect to the taxable amount of the unpaid balance due on the uncollectible credit accounts within three years following the date on which the accounts were charged off as uncollectible for federal income tax purposes.
(6) If a retailer recovers in whole, or in part, amounts previously claimed as bad debt credits or refunds, the amount collected shall be included in the first tax report filed after the collection occurred. (Sections 40‑23‑8 and 40‑23‑68(e))
(7) If taxable items upon which sales or use tax has been paid by the retailer are repossessed, the retailer is allowed a credit or deduction for that portion of the actual purchase price remaining unpaid. The deduction must not include any nontaxable charges which were a part of the original sales contract. Any payments made by the purchaser prior to repossession must be applied ratably against the various charges in the original sales contract.
Author: Dan Devaughn
Statutory Authority: Code of Ala. 1975, §§40‑23‑31, 40‑23‑83.
History: Filed with LRS March 20, 1992; Certification filed August 20, 1992, effective September 25, 1992. Amended: Filed September 15, 1998; effective October 20, 1998.
810‑6‑4‑.02 Amounts Of Sales Tax To Be Collected On Admissions. (Repealed)
Author: Patricia A. Estes
Statutory Authority: Code of Ala. 1975, §§40‑23‑31.
History: Repealed: Filed June 4, 1998; effective July 9, 1998.
810‑6‑4‑.02.05 Consigned Property. Sellers of property held on consignment are required to include the gross proceeds of sales of such property in sales tax returns filed under the Sales Tax Law.
Author:
Statutory Authority: Code of Ala. 1975, §§40‑23‑31.
History:
810‑6‑4‑.03 Discounts Allowed On Payments Of Sales Tax Made Before Delinquency.
(1) Executive Order Number 2 issued by Governor John Patterson on January 8, 1960, authorized, empowered, and directed the Department of Revenue to allow a sales tax discount not to exceed five percent of the first one hundred dollars ($100) of sales taxes levied and two percent of the sales taxes levied over one hundred dollars ($100) per month. This discount was applicable for sales taxes collected on or after October 1, 1959 through May 31, 1996 for taxes paid before delinquency.
(2) In accordance with Section 40-23-36, Code of Ala. 1975, Executive Order Number 20 issued by Governor Fob James, Jr. on May 31, 1996, authorized, empowered, and directed the Department of Revenue to allow a sales tax discount for sales taxes due and payable to the State of Alabama by persons licensed under Section 40-23-6, Code of Ala. 1975, for sales taxes collected on or after June 1, 1996. This discount could not exceed five percent of the first one hundred dollars ($100) of sales taxes levied and two percent of the sales taxes levied over one hundred dollars ($100) per month and, further, was limited to a total maximum discount of nine hundred dollars ($900) per month to any license holder and was limited to that amount for each retail license holder regardless of the number of retail locations of that license holder within the state. No discount was authorized or allowed upon any taxes which were not paid before delinquency. This discount was applicable for sales taxes collected on or after June 1, 1996 through April 30, 2001.
(3) Beginning with calendar year 1999, effective January 1, 1999, Section 40-23-7(d), Code of Ala. 1975, allows certain taxpayers to file sales tax returns with the Alabama Department of Revenue on a calendar quarter or calendar year basis rather than on a monthly basis. The sales tax discount for license holders who file monthly, quarterly, or annually shall not exceed five percent of the first one hundred dollars ($100) of sales taxes levied and two percent of the sales taxes levied over one hundred dollars ($100) per month, per calendar quarter or per calendar year, respectively, and further, for sales taxes collected through April 30, 2001, was limited to a total maximum discount of nine hundred dollars ($900) per month to any license holder, and for sales taxes collected on or after May 1, 2001, is limited to a total maximum discount of four hundred dollars ($400) per month to any license holder, and limited to that amount for each retail license holder regardless of the number of retail locations of that license holder within the state. No discount is authorized or allowed upon any taxes which are not paid before delinquency.
(4) In accordance with Section 40-23-36, Code of Ala. 1975, Executive Order Number 53 issued by Governor Don Siegelman on May 22, 2001, authorizes, empowers, and directs the Department of Revenue to allow a sales tax discount for sales taxes due and payable to the State of Alabama by persons licensed under Section 40-23-6, Code of Ala. 1975, for sales taxes collected on or after May 1, 2001. This discount shall not exceed five percent of the first one hundred dollars ($100) of sales taxes levied and two percent of the sales taxes levied over one hundred dollars ($100) per month and, further, is limited to a total maximum discount of four hundred dollars ($400) per month to any license holder and is limited to that amount for each retail license holder regardless of the number of retail locations of that license holder within the state. No discount is authorized or allowed upon any taxes which are not paid before delinquency.
(5) The discount outlined in paragraphs (1), (2), (3) and (4) above applies to state sales tax and also to all county and municipal sales taxes administered by the Alabama Department of Revenue. The rate, maximum, and effective date of the discount for each county and municipal sales tax due and payable to the Alabama Department of Revenue shall be the same as those provided with respect to the discount for state sales tax. (Sections 11-3-11.3, 11-51-180, et seq.; 11-51-200, et seq.; and 40-12-4, et seq., Code of Ala. 1975)
Author: Donna Joyner
Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40‑23‑31, 40-23-36.
History: Repealed and Replaced: Filed September 3, 1996; effective October 8, 1996. Amended: Filed September 15, 1998; effective October 20, 1998. Amended: Filed August 30, 2001; effective October 4, 2001.
810‑6‑4‑.04 Extension Of Time For Filing Return. The Department "for good cause" may extend the time , not to exceed 30 days, for filing sales and use tax returns. The Supreme Court of Alabama in State v. Louis Pizitz Dry Goods Company, 11 So. 2d 342, held that the request for such an extension must be received by the Department prior to the date the return became delinquent in order to have the extension granted. No discount for timely payment will be allowed on sales or use tax paid after the statutory due date but within the extended time and interest must be added to the tax. (Adopted October 1, 1959, amended November 3, 1980, readopted through APA effective October 1, 1982, amended January 10, 1985). (Sections 40‑23‑7 and 40‑23‑74).
Author: Dan DeVaughn
Statutory Authority: Code of Ala. 1975, §§40‑23‑31, 40‑23‑83.
History: Amended: January 10, 1985. Filed November 17, 1992; certification filed February 18, 1993; effective March 24, 1993.
810‑6‑4‑.05 Failure Of Vending Machine Operator To Collect Does Not Relieve Him Of Payment. (Repealed)
Author: Patricia Estes
Statutory Authority: Code of Ala. 1975, §§40‑23‑31.
History: Amended: August 16, 1974. Readopted through APA effective October 1, 1982. Repealed: Filed June 25, 1998; effective July 30, 1998.
810‑6‑4‑.06 Failure Of Seller To Collect Tax. Failure to collect the tax due is unlawful. Both the Sales and Use Tax Laws require the seller to collect the tax due. Provisions of these laws make it unlawful to fail to collect the tax making such failure a misdemeanor punishable by fine or by imprisonment or both. The Sales and Use Tax Laws further provide, however, that the failure, refusal, or inability of the seller to collect the tax does not relieve him of his liability to the state for the taxes due on his sales. In the court case Tanner v. State, 190 So. 292, the Alabama Court of Appeals upheld the conviction of Tanner, who had failed or refused to add the sales tax due to the sales price of merchandise sold by him. 40‑23‑26
Author:
Statutory Authority: Code of Ala. 1975, §§40‑23‑31; 40‑23‑83.
History: Revised December 31, 1984.
810‑6‑4‑.07 Farm Machines, Machinery, And Equipment.
(1) Sales at retail of any machine, machinery, or equipment which is used in planting, cultivating, and harvesting farm products, or used in connection with the production of agricultural produce or products, livestock, or poultry on farms, and sales at retail of any parts of, or attachments and replacements for, any such machine, machinery, or equipment which (i) are made or manufactured for use on or in the operation of the machine, machinery, or equipment, and (ii) are necessary to and customarily used in the operation of the machine, machinery, or equipment are taxable at the reduced farm machine rate of sales or use tax. (Sections 40-23-37 and 40-23-63, Code of Ala. 1975)
(2) The reduced farm machine rate does not apply to sales of parts, attachments, and replacements for any automotive vehicle or trailer designed primarily for public highway use, except farm trailers used primarily in the production and harvesting of agricultural commodities. (Sections 40-23-37 and 40-23-63)
(3) The term “machine, machinery, and equipment” is understood to mean items such as tractors, detachable plows, harrows, planters, cultivators, fertilizer spreaders, plow stocks, turning plows, seed drills, and sprayers. The general rate of sales or use tax applies to all hand tools. A power chain saw sold for use by a pulpwood dealer in cutting trees for sale in the dealer’s regular course of business qualifies for the reduced farm machine rate of sales or use tax. A power chain saw sold for nonfarm use is taxable at the general rate of sales or use tax. See Rule 810-6-2-.66.05 Portable Power Saws.