ADOR Finalizes Local Nexus Regulation

The Alabama Department of Revenue has just finalized its new local nexus regulation, Ala. Admin. Code Rule 810-6-5-.04.02, that will apply to transactions occurring on or after January 1, 2014, following its rule-making proceeding and a substantial amount of input from the business and tax practitioner community. Following its efforts last year to broaden its nexus test for interstate transactions (particularly those involving delivery of goods by an out of state vendor into the state), the new regulation explains when a business is required to collect and remit local—county and, if applicable, municipal—sales and use taxes.

According to the newly-finalized regulation, that was published today in the Alabama Administrative Monthly, the same standards used in determining whether a business engaged in interstate commerce will be required to remit State of Alabama sales and use tax will now be used in determining whether local sales and use tax must also be collected