Alabama House Bill HB364

Alabama 2025 Regular Session

• Introduced: 2/27/25
• Refer: 2/27/25

Caption

Simplified sellers use tax, marketplace facilitator further defined to exclude local delivery services

Impact

The impact of HB364 represents a pivotal shift in how local delivery services are treated under Alabama tax law. By distinguishing between marketplace facilitators and local delivery services, the bill provides clearer guidelines for businesses engaged in delivery operations. For businesses that rely on local delivery services to fulfill their sales, this change could reduce their tax burden, as they would no longer have to navigate the complexities associated with SSUT compliance. However, local delivery services will still need to collect and remit the standard sales taxes, ensuring that the revenue flows to state and local governments.

Summary

House Bill 364 aims to refine the existing definition of marketplace facilitators within Alabama's tax code, specifically regarding the collection of the Simplified Sellers Use Tax (SSUT). The bill proposes to exclude local delivery services from being classified as marketplace facilitators. This change is significant as it means that transactions involving local delivery services will not be subject to SSUT, although they will still be liable for state and local sales taxes. The overarching goal is to clarify the tax responsibilities of various businesses operating under the evolving landscape of e-commerce and local retail.

Contention

The bill has sparked debate among stakeholders in the retail and delivery sectors. Proponents argue that excluding local delivery services from the SSUT framework allows for a more accurate representation of the delivery landscape in Alabama, fostering a more equitable tax system where local businesses are not unfairly burdened with additional tax obligations. Conversely, some critics express concerns that this exclusion could create loopholes that might be exploited, resulting in lost revenue for the state. Additionally, there are apprehensions about how these changes might affect the tax landscape for online retailers and their logistics partners in Alabama.