Commissioner Russell Named MTC Vice-Chair…The Multistate Tax Commission’s (MTC) Executive Committee elected Alabama Commissioner of Revenue Tim Russell to the post of vice-chair on May 7, 2009.  

New Failure to Pay Penalty Becomes Law… Act 2009-144, effective March 24, 2009, imposes a failure to timely pay penalty.  This new penalty applies to any tax amount that was required to be shown on any tax return, if the tax remains unpaid after 30 calendar days from the date the department notifies the taxpayer of the unpaid amount. 

Federal Refund Offset…A new state law now requires the administrative fee charged by the U.S. Treasury Department for Alabama’s participation in the Treasury Offset Program (TOP), a debt collection program, to be paid by Alabama taxpayers whose federal refunds are intercepted for payment of past-due Alabama income tax debts. 

New E-File Requirement…All quarterly International Fuel Tax Agreement (IFTA) fuel use tax returns must be filed electronically, effective April 1, 2009. 

Automatic Filing Extensions…Alabama individual and business taxpayers are no longer required to file an Alabama extension form if they find they cannot meet their annual return filing deadlines.  Taxpayers will be given an automatic single six-month extension to file their returns or single five-month extension for Form 65 and Form 41.  No filing extension forms will be required.  The automatic extension only applies to a filing extension; no extensions are granted for payment.  ALL TAX PAYMENTS ARE DUE BY THE ORIGINAL DUE DATE OF THE RETURN.   Note:  Automatic extensions do not apply to business taxpayers filing a financial institution excise tax return.  The Form ET-8 is required.

New Online Service…Businesses involved in the sale of abandoned motor vehicles now have access to a new title search feature available through ADOR’s Web site that will help them meet required notification procedures.

Deductions for Small Business Health Insurance Premiums…Qualified business owners and qualifying employees may wish to begin participating in employer-provided health insurance during 2009 for a deduction on the 2009 Alabama income tax return.  (Reference Act 2008-559.)  

Notice Regarding Alabama Corporate/Partnership Signature Documents…The Alabama Department of Revenue (ADOR) advises that effective immediately, tax preparers and tax practitioners are no longer required to submit an electronic copy of the Form AL8453C, signature document, to the ADOR when electronically filing Alabama corporate and partnership returns.   

E-mail Scam Warning Issued…The Alabama Department of Revenue (ADOR) alerted taxpayers Jan. 28 of an e-mail scam in which taxpayers are reportedly advised by the ADOR that they are due an Alabama income tax refund.  In the e-mail communication, taxpayers are asked to click on a link provided in the e-mail and complete a “refund form.”  The ADOR advises that if you receive an e-mail from someone claiming to represent the ADOR and seeking personal or financial information do not reply.  The Alabama Department of Revenue does not initiate taxpayer communications through e-mail. 

Operation Clean Slate…On Jan. 15, Governor Bob Riley and Revenue Commissioner Tim Russell announced that the Revenue Department will temporarily waive penalties and will not seek criminal prosecutions for delinquent tax filers who come forward and pay what they owe in state taxes.   The effort, called Operation Clean Slate, runs from Feb. 1 through May 15.  During this period, individuals and businesses that voluntarily come forward and file past-due returns or amend their returns to properly report their tax liabilities will be granted leniency, provided they are not already under investigation, nor have been contacted by the department as to their proper tax liability.  This program is available, but not limited, to Individual and Corporate Income taxes, Business Privilege Tax, and if unregistered with the department, Sales Tax and Use Tax.

Lower E-filing Requirement for Employers/Filing Agents…Employers and filing agents who issue 100 or more Form W-2s (and/or Form 1099s with Alabama tax withheld) must now electronically file this information and the Form A-3 through ADOR’s Web site.  Beginning Jan. 1, 2010, the electronic filing threshold is reduced to 50 or more forms.   

Act 2008-504 Guidance… Recently updated forms and instructions may be downloaded under the link entitled “FORMS” at www.revenue.alabama.gov.  Be sure to check out the new “Complete Package” link providing quick access to forms, definitions, Q&As, and a copy of Act 2008-504. 

Changes in Farmers’ Gasoline Tax Refund Procedures… A recent law change affecting the latter part of the 2008 refund claim year allows Alabama farmers transporting biomass to electricity-generating facilities to receive a fuel tax refund up to $1,000 and also extends farmers’ fuel tax refund provisions to include clear motor fuel used on the farm in tractors and other farm machinery attached to tractors.  Since the 2008 refund claim year will be a transition year that requires the use of refund procedures under both old and new guidelines, the department advises that farmers will be required to file two refund claim forms for the 2008 year.   

2008 Federal Depreciation Rules… The ADOR advises that Alabama income tax laws will not follow the 2008 federal law change, but will continue to be tied to the federal depreciation rules without consideration of the changes implemented by the Economic Stimulus Act of 2008.  The 2007 Alabama income tax forms do not account for the recent change in the federal law and the ADOR offers special guidance to fiscal-year filers who may be affected. 

Internet Tax Freedom Act Update…The Internet Tax Freedom Act Amendments Act of 2007 extended the moratorium on state and local government Internet access taxes for the third time, through Nov. 1, 2014.  The 2007 Act also amended the definition of “Internet access” in relation to how it is used with various services that utilize the Internet.  For more details, visit http://www.revenue.alabama.gov/salestax/whatsnew.html.

Effective April 7, 2008, accountants or tax filing services who file withholding tax returns and payments on behalf of employers must register with the Department as a bulk filer and must utilize their bulk filer registration when filing withholding tax returns on behalf of their clients.

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Alabama Businesses Can Now E-file Their State Corporate Income Tax Returns…The ADOR recently announced that Alabama is the eighth state to partner with the IRS and approved software vendors to provide a single-point  electronic filing method that allows federal and state corporate income tax returns to be filed simultaneously. 

Make a Note:  Penalty Rule … Rule 810-14-1-.30.01, effective July 13, 2007, addresses ADOR procedures for imposing the failure to timely file penalty referenced in Section 40-2A-7(a)(5), Code of Alabama 1975.

New Business Workshops…Mark your calendar and attend one of ADOR’s free workshops.  Click here for workshop locations and times.