Today is Saturday, October 25, 2014
Important Notices!
*****  Administrative Law Division Move Effective October 1st, 2014  *****
The Taxpayer Fairness Act transfers Revenue's Administrative Law Division to the newly-created Alabama Tax Tribunal; their website is now http://taxtribunal.alabama.gov/.
 
ADOR - Consumers Use Tax

 

Consumers Use Tax

If your out-of-state purchase did not include Alabama sales tax you may owe use tax.

What is Use Tax?

Use tax is the counterpart of sales tax. It is applied when merchandise is purchased outside of Alabama and imported into the state. The use tax rate is the same as the sales tax rate.

Why A Use Tax?

The Alabama use tax was enacted in 1939 to prevent vendors located outside the state from having an unfair competitive advantage against the instate vendors who have to charge the sales tax. The liability for paying the use tax falls on the purchaser. If the vendor does not collect the use tax, it is the responsibility of the purchaser to self-assess and report the tax due to the Department of Revenue.

What Is Taxable?

The use tax applies to the same merchandise that is taxable under the Alabama sales tax law. This includes all tangible personal property that is purchased at retail and brought into Alabama for storage, use, or consumption unless it is specifically exempted by law.

What Is The Tax Rate?

Automotive Rate - 2%

If you purchased an automotive vehicle from outside the state and did not pay the casual sales and use tax when you purchased your tag, or if no tag is required for the vehicle, you owe use tax at the rate of 2% of the purchase price. Examples of items not requiring tags which qualify as automotive vehicles include off-road motorcycles, ATV's and self-propelled construction equipment.

Agriculture Rate - 1-1/2%

Equipment and its replacement parts used in connection with the production of agricultural products, livestock, or poultry on farms is subject to tax at the rate of 1-1/2%.

Machine Rate - 1-1/2%

Machines and the parts for machines used in mining, quarrying, compounding, processing and manufacturing tangible personal property are taxed at the rate of 1-1/2%.

General Rate - 4%

All other taxable tangible personal property is taxed at the rate of 4% of the purchase price.

Questions Often Asked:

Do I have to pay use tax on telephone, mail order, or Internet purchases?

Yes. If you make a purchase from outside the state by telephone, mail order, or the Internet and the vendor fails to charge you tax, you are responsible for paying use tax.

Who should pay use tax?

Individuals and businesses are required to pay use tax when making out-of-state purchases that are subject to use tax.

How is use tax reported and paid?

To report use tax to the state, file and pay the Consumers Use Tax Return electronically through the My Alabama Taxes (MAT) system.  If you do not have a valid consumers use tax account number, and only need to report and pay on an occasional basis, (click here for a downloadable return) and mail the completed return along with a check or money order to the following address:

Alabama Department of Revenue
Sales & Use Tax Division
P.O. Box 327710
Montgomery, AL 36132-7710

City and county use tax is also due and should be reported and paid to the appropriate local tax authority, or their administrator. Please see our Local Tax web pages for the appropriate tax rates and administrators. (Click here for a downloadable local tax return for state-administered localities - please contact the Local Tax Unit at 334-242-1490 for assistance in completing this return correctly.)

When is the tax due?

The tax is due on the first of the month following the month in which the merchandise is purchased. A return should be completed for each month in which merchandise is purchased. The tax is considered delinquent after the 20th of the succeeding month. Example: Purchases made in January - the tax is due on February 1st and delinquent after February 20th.

Where can I get help or additional forms?

The Alabama Department of Revenue has Taxpayer Service Centers conveniently located throughout the state. If one of these locations is not convenient, call the Use Tax Section of the Sales, Use & Business Tax Division at: (334) 242-1490 or write to the following address:

Alabama Department of Revenue
Sales & Use Tax Division
Use Tax Section
P. O. Box 327720
Montgomery, AL 36132-7720