Monday, November 28, 2011

Alabama Streamlined Sales and Use Tax Commission Issues Preliminary Report

The Alabama Streamlined Sales and Use Tax Commission, created by the Alabama Legislature earlier this year (see previous post on "Tilting at Windmills?" for details), has issued a fascinating Preliminary Report.  See the complete Preliminary Report by clicking hereReaders will recall that the charge of the Commission is to "identify and develop the programs necessary to come into compliance with the Streamlined Sales and Use Tax Agreement, in the event that Alabama becomes a participating member of the Agreement. The Commission is required to research Alabama's existing tax laws to identify the changes that will be necessary in order to bring Alabama into compliance with the Agreement, in the event that federal legislation adopting the Agreement becomes law; and to report these findings to the Legislature by the third day of the next regular legislative session following the enactment of federal legislation implementing the Agreement."

Of particular interest is the Preliminary Report's recommendation that the the Alabama Department of Revenue serve as the single entity administrator of all Alabama state and local sales and use taxes.  Designation of such a single administrator is a crucial piece of the puzzle if Alabama is ever to participate in the Streamlined Sales Tax Agreement and will likely be one of the more controversial recommendations of the Commission with many local tax administrators. 

The Commission addresses some concerns of the local administrators in the Preliminary Report by allowing local tax authorities to continue to audit taxpayers, provided the audit is performed in coordination with the Department of Revenue and the audit covers all applicable Alabama taxing jurisdictions, not just the one local jurisdiction performing the audit. 

In addition, the Commission recommends the establishment of a State and Local Advisory Council to make certain that the Department of Revenue addresses issues of concern to local taxing authorities.

For those who might be interested in commenting on the Preliminary Report, note that you must do so within 45 days of the date of the report, November 28, 2011.

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