| SUBJECT: | ACT NO. 2001-1090, PROVIDERS
OF COMMERCIAL MOBILE RADIO SERVICES IN THE STATE OF ALABAMA |
On December 21, 2001, the Alabama Legislature passed Act No. 2001-1090 in order for the State of Alabama to be in compliance with the provisions of the federal Mobile Telecommunications Sourcing Act of 2000. The new legislation increases the tax rate on providing commercial mobile radio services from four percent (4%) to six percent (6%), amends the definition of monthly charges to include all airtime charges, and subjects providers of paging/beeper services and other one-way and two-way radio communication services to the provisions of this act. The new law also allows those providers of commercial mobile radio services to deduct and retain from the gross amount of tax billed nine-tenths of one percent of the amount of such tax billed in consideration of the costs incurred by the provider in collecting and remitting the tax. These changes are effective for customer bills dated on or after February 1, 2002, regardless of when the services being billed were provided. However, effective October 1, 2002, the amount deducted and retained by the provider shall be one-fourth of one percent of the gross amount of such tax billed.
New tax forms will be provided prior to the March 20, 2002, due date for taxes due for the month of February 2002. However, amounts collected on customer bills dated prior to February 1, 2002, should continue to be reported on the forms previously issued.
If you are not currently registered to collect the mobile communication services tax, an application can be downloaded from our web site at http://www.ador.state.al.us/salestax/stforms.html. A completed application is required so that we may provide you with the proper forms in order to remit the mobile communication services tax on a monthly basis. If you have any questions regarding whether your business is subject to the provisions of this Act, you may call 1-800-322-4106, extension 8 or fax your response to (334) 353-7867.
The Department promulgated rule 810-6-5-.26.01 to implement these changes. This rule is available on our web site.