ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-3-.51. Municipal Sales and Use Taxes and Gross Receipts Taxes.
(1) The Department of Revenue is the collecting agency for many municipalities
in Alabama levying a true sales and use tax or a gross receipts tax.
(2) Where a municipality levies a true sales and use tax under the provisions of
Section 11-51-200, Code of Alabama 1975 as amended, the sellers located in the
municipality are required to collect the municipal sales tax on retail sales of tangible
personal property in the same manner as the state sales tax as the tax is a consumer tax. If
the sale is made and as a part of the sales agreement the seller is required to deliver the
item purchased outside the taxing jurisdiction of the municipality, the sale is exempt from
the tax. If the seller whose place of business is located outside the municipality has
salesmen soliciting orders within the municipality, the seller is required to collect and remit
the sellers use tax on retail sales of tangible personal property in the same manner as an
out-of-state seller who has salesmen soliciting orders in Alabama and who files a state sellers
use tax return. It does not matter how delivery is made.
(3) The gross receipts tax which the department is required to collect under
the provisions of Section 11-51-180, Code of Alabama 1975 as amended, is more commonly
referred to as sales tax. This tax is levied upon the seller for the privilege of making
retail sales of tangible personal property in the municipality levying the tax. If a sale and
delivery of tangible personal property is made within the municipality, the tax is due. If the
sale is made and as part of the sales agreement the seller is required to deliver the item
purchased outside the taxing jurisdiction of the municipality, the tax is not due. If a seller
who is located outside the municipality levying the tax has salesmen soliciting orders within
the municipality, the seller is required to remit tax on retail sales of tangible personal
property provided the seller delivers the item in his or her own equipment or by common carrier
F.O.B. destination, title passing in the taxing jurisdiction of the municipality. If the
sale is made F.O.B. point of origin, title passing outside the taxing jurisdiction of the
municipality, the gross receipts tax is not due.
(4) A municipality that levies a gross receipts tax does not levy a use tax.
Therefore, purchaser does not owe use tax on purchases if in a gross receipts jurisdiction.
(Adopted August 15, 1974, readopted through APA effective October 1, 1982, amended January 10,
1985, amended May 4, 1994, amended October 20, 1998)
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