TAX GATEWAY

Alabama

Alabama Electronic Commerce Taxation

Statutes

Alabama Statute § 40-14-21 franchise tax applies to corporations "doing business" in the state.
Alabama Statute § 440-21-80 see also § 440-21-80(11)(iv) Internet access charges.
Alabama Statute § 440-23-2(1) sales of goods purchased over the Internet treated same as sales of tangible personal property; they are subject to the rules of nexus and Alabama sales/use tax laws.
Pending legislation- Senate Bill 59 has been introduced and would exempt Internet access charges from the state telecommunications service tax.

Administrative

Alabama Dept. of Revenue Sales and Use Tax Rule 810-6-1-.37(1)(3)(4) information/software purchased over the Internet.
Alabama Dept. of Revenue Sales and Use Tax Rule 810-6-5-.26 - states that "Internet access charges are not taxable" under the state's utility privilege tax.
Alabama Dept. of Revenue, Revenue Ruling No. 94-015 sales/use tax not applicable to information transmitted electronically or by magnetic-tape.
Alabama Dept. of Revenue, Revenue Ruling No. 96-003 The Alabama Legislative Council voted in Oct. 1997 to temporarily suspend Ruling 96-003 (Nov. 22, 1996), which had concluded that Internet and related online access charges were subject to utility gross receipts and utility service use taxes.

Cases

Wal-mart Stores, Inc. v. City of Mobile and County of Mobile, Docket No. 1941890 Supreme Court of Alabama (1996).
Color Craft, Inc., Taxpayer v. State of Alabama Department of Revenue, 96-223 Alabama Department of Revenue, Administrative Law Decision (1997).

Commentaries

Vertex Inc. - Alabama

The Ryan Tax Gateway^® is a free service provided to tax professionals. Ryan disclaims responsibility for applying the information contained on these sites to any specific set of facts. For questions and suggestions, please e-mail info@ryan.com.

TAX DEVELOPMENTS

Court of Appeals Narrows the “Temporary Storage” Exclusion from Texas Use Tax.
In Combs v. Chapal Zenray, Inc., No. 03-10-00646-CV (Tex. App. – Austin, November 18, 2011, no writ history), the Third Court of Appeals in Austin... >More

Alabama Court of Civil Appeals Denies Home Depot’s Attempt to Take Bad Debt Deduction.
On November 4, 2011, the Alabama Court of Civil Appeals (“Court”) denied Home Depot’s petition for refund of sales tax paid on uncollectible debts. Similar... >More

View all Tax Developments >