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Wholesale to Retail Accountability Program (WRAP) FAQs

1.  What is the Wholesale to Retail Accountability Program (WRAP)?

The purpose of the Wholesale to Retail Accountability Program is to ensure sales tax collected by retailers is submitted to the state of Alabama to finance the services provided to Alabamians.

To ensure a level playing field for all businesses, the Department of Revenue is constantly monitoring and auditing sales tax collected and remitted. If you have received an assessment from the Wholesale to Retail Accountability Program, purchases of items for resale were not reported on your sales tax return by you as sold. Therefore, the very minimum tax due based on the amount of your purchases has been assessed.

To read more about the Wholesale to Retail Accountability program, please visit the Alabama Department of Revenue’s website at https://revenue.alabama.gov/sales-use/wrap/.

2.  I received an assessment from the Wholesale to Retail Accountability Program. Why do I owe money?

An analysis of our records shows that reported sales are less than purchases for the period of the assessment. It appears that you have collected sales tax but have not remitted the tax to the state of Alabama. We have estimated your sales and think you owe at least this amount. You are also being charged a penalty for not reporting and paying the correct amount of tax at the time of filing.

3.  How are assessments calculated for the Wholesale to Retail Accountability Program?

The department has an explanation of how these assessments are calculated below.

EXAMPLE: Purchases with Markup
Total Beer and Wine Purchases with Markup (Purchases + (Purchases * 35%)) $675,000.00

+

Total Liquor Purchases with Markup (Purchases + (Purchases * 51%)) $400,000.00

+

Total Tobacco Purchases with Markup (Purchases + (Purchases * 35%)) $2,025,000.00

Total Tax Measure Reported on Retailer’s State Sales Tax Return (Line 3 column E) ($1,500,000.00)

=

Amount of Underreported Net Sales $1,600,000.00
* 4%
Net Tax Due $64,000.00

 

4.  How does the Alabama Department of Revenue know what I purchased through the Wholesale to Retail Accountability Program?

As of July 1, 2018, wholesalers selling beer, wine, and tobacco products are required to report retailers’ purchases to the Alabama Department of Revenue per state law (Act 2017-294).

5.  There are items other than beer, wine, alcohol, and tobacco included in my Wholesale to Retail Accountability Program (WRAP) purchase data. Are non-beer, non-wine, non-alcohol and non-tobacco purchases used in the WRAP calculation? If not, why are they showing up in my data?

Currently, only beer, wine, alcohol, and tobacco purchases are being used to calculate WRAP assessments. The reason other items may appear in the data is because wholesalers have provided this information to the Department of Revenue.

6.  My Notice of Proposed Assessment says that I can access the wholesaler data used to make this assessment online, but I am having difficulty. How can I get the data?

The data used to make the assessment will be available to you through the MyAlabamaTaxes (MAT) website at https://myalabamataxes.alabama.gov.  Log into MyAlabamaTaxes and go to your sales tax account. From your sales tax account screen, in the “I Want To” menu, click the “View WRAP Periods” link and select the applicable period.

7.  For the Retail Accountability Program, what username do I use to download the wholesaler data or recover my password?

Your purchases can be reviewed by logging into MyAlabamaTaxes. If you have previously registered to file your sales tax return though the MAT website, you would use that username and password. To recover a password, click the “Forgot Password?” link on the MAT home screen. If you have not previously registered to file your sales tax return through MAT, then you will create your own username and password the first time you log in to MAT.

8.  What if the wholesaler data is incorrect?

If you find any errors in your purchase records, then you will need to contact your wholesaler/distributor directly and have them correct the data with the department. Should you encounter any unusual circumstances, or you need assistance in resolving reporting issues, you may contact the WRAP Unit at 334-353-0440 or WRAP@revenue.alabama.gov.

9.  What can I do differently to avoid an assessment from the Wholesale to Retail Accountability Program?

You received an assessment because you are not reporting all your sales and remitting the collected tax on your sales tax returns. If you accurately report and remit all your sales on your sales tax return, you should not receive future assessments.

10.  I received a Wholesale to Retail Accountability Program assessment. Should I amend my sales tax returns?

Possibly. If you feel that an amended return should lower your assessment, contact the Wholesale to Retail Accountability Program Unit at WRAP@revenue.alabama.gov or 334-353-0440 and provide the amended information. The assessment will not be automatically adjusted due to amended returns.

Please note: Amended sales tax returns will not cause the Wholesale to Retail Accountability Program Assessment to be recalculated or the penalty to be removed from the assessment. Tax paid on amended returns filed after the Wholesale to Retail Accountability Program Assessment is issued will be a payment toward the Wholesale to Retail Accountability Program Assessment.

11.  Can I get credit for cigarette buydowns?

Yes. You need to mail your buydown information from the cigarette manufacturer to the Wholesale to Retail Accountability Unit at the address listed below. Please be sure to include in this correspondence a copy of your Notice of Assessment so that the buydown credit will be applied to the correct assessment. To receive credit toward your assessment, the buydown information from the cigarette manufacturer must include:

1. The name of the cigarette manufacturer providing the buydown

2. The name of the business receiving the buydown

3. The buydown period which is usually the date (month and year) that the cigarettes were purchased but is not the date the buydown was paid

4. The amount of the buydown credit

Without all this information, a buydown credit will not be granted.

Mail buydown information and a copy of the Notice of Assessment to:

Alabama Department of Revenue
Attn:  Wholesale to Retail Accountability Program
Sales and Use Tax Division
P O Box 3271000
Montgomery, AL  36132-7100

12.  How do I know if I participate in a cigarette buydown program?

If you are unsure, you probably do not participate in a buydown program with a cigarette manufacturer. You would have a contract or agreement with a cigarette manufacturer if you were a participant. If you are still unsure, you should contact your cigarette manufacturer’s representative to verify.

13.  What can I submit as documentation/proof of cigarette buydowns for the Wholesale to Retail Accountability Program?

The documentation you submit for cigarette buydowns must be from the cigarette manufacturer. We will not accept any documentation that has been altered or can be altered, i.e. spreadsheets in any format, word processing files and text files. Screenshots of cigarette manufacturer websites are acceptable if the screenshot displays the name of the cigarette manufacturer, the name of your business, the buydown period, the amount of the buydown credit, and it is not a screenshot of a spreadsheet that can be altered.

If the only documentation that you can get is in an unacceptable format, you will be required to submit additional documentation. This additional documentation could be a signed statement from your tobacco representative that details the amounts on the documentation by month or quarter, or bank statements showing the amounts of direct deposits to your bank account by the tobacco manufacturer. However, bank statements alone will not be accepted in lieu of the manufacturer documentation described above because the bank statements do not include the buydown period.

14.  Are manufacturer coupons and manufacturer buydowns for tobacco treated the same?

No. Tobacco buydowns are treated differently. The sales tax is due on the sales price after applying tobacco buydown credits. However, the sales tax is due on the sales price before a manufacturer’s coupon is applied.

15.  What if I make a payment now, then later I discover an error or locate additional buydowns?

If you submit additional documentation that would allow for an adjustment to the assessment and this creates an overpayment credit, then you will be able to take the credit on your next sales tax return.

16.  What if I can’t pay my Wholesale to Retail Accountability Program assessment right now, and I need to pay in installments?

After you have worked with the Wholesale to Retail Accountability Program Unit, and you have no further information that might reduce your assessment, the Department of Revenue’s Collection Services Division can evaluate your account to see if you qualify for a payment plan.

If a Collection Services Division agent has contacted you about payment of the assessment, notify them that you are interested in a payment plan. If an agent has not sent you a letter, please call Collection Services at 334-353-8096 for additional information.

17.  Can I transfer product between multiple locations that I own?

No, product should not be transferred between locations by retailers. The purchase invoice on hand at the store must show the address of the store the product is located in. The only way product could be transferred is if the store product is being transferred from is registered and filing the sales for resale report.

18.  I sold cigarettes to other retailers, and those sales are not reported on line 7 of the monthly sales tax return. How do I get credit for those sales to reduce my assessment?

You cannot make sales for resale without a tobacco license. Therefore, you must pay the sales tax on those sales.

19. What should I do if I sell my business?

You must contact the Alabama Department of Revenue and close your sales tax account. Please contact the Business Registration section at Business.Registration@revenue.alabama.gov or 334-242-1584.

Your Sales Tax Certificate is no longer valid on the last day your business is open. You must contact your wholesalers in writing to notify them that your Alabama Sales Tax Certificate is no longer valid.

20.  I sold my store but I still received a Wholesale to Retail Accountability Program assessment. How do I get the assessment resolved?

Wholesalers are still reporting sales to your closed business. Please download the data and notify, in writing, any wholesaler still reporting sales to your business that your business is closed. Once the wholesalers have corrected the data they uploaded, please notify us so that we can use the corrected data to adjust your assessment. If the wholesalers do not change the data because you did not notify them in a timely manner that you had closed your business, you could still be liable for the Wholesale to Retail Accountability Program assessment.

21.  What if I change my business structure, and the Alabama Department of Revenue sent me a new sales tax certificate?

You must contact your wholesaler(s) in writing to notify them that your Alabama Sales Tax Certificate is no longer valid. Then you will need to present the new sales tax certificate to the wholesaler(s).

22.  I have monthly or quarterly inventories that show I have more product at the end of the quarter than I had at the beginning of the quarter. Will this change the WRAP assessment?

Yes. However, if you have material inventory changes you want considered, you must submit detailed inventory records from the beginning of the assessment period and the end of the assessment period. Also, you may submit other documentation that may affect inventory such as police reports for theft or insurance documents for fire or disaster.

23.  What if I do not agree with the Retail Accountability assessment?

Please contact the Wholesale to Retail Accountability Program unit by email at WRAP@revenue.alabama.gov or telephone at 334-353-0440. You must tell us why you think this assessment is incorrect. You will be asked to provide sales documentation and/or purchase records like an audit. During this process, we may determine you owe more than the assessment or refer your account to the field for a full audit.

You may also request an informal conference to discuss this assessment. If you request an informal conference within 30 days from the date of the Notice of Preliminary Assessment, the conference will be granted. For more information about requesting an informal conference, please visit the Alabama Department of Revenue’s website.

24.  Can I have my accountant or bookkeeper contact the Department of Revenue about my Wholesale to Retail Accountability Program assessment?

The department can only discuss your tax information with you or an authorized employee of your business. You may submit a completed Power of Attorney allowing the department to speak with your designated agent.

25.  Does the Wholesale to Retail Accountability Program assessment close the period, or can I still be selected for a full audit?

This assessment does not close the period, so you could still be selected for full audit that might include this period or other periods.

26.  What if I have read these questions, and I still have questions about my Wholesale to Retail Accountability Program assessment?

Please check our website for other reference materials that may answer your questions. You can email additional questions to WRAP@revenue.alabama.gov or call 334-353-0440.