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Untitled Document
 

 

Consumer Use Tax

 

  • Do you make retail purchases when you are on vacation outside of Alabama?

  • Do you buy any items from businesses on the Internet?

  • Do you purchase any retail items over the telephone?

  • Do you purchase any retail items from catalogs or mail order?

    If you answered "Yes" to any of the above questions, you may be liable for Consumer Use Tax. Use the Consumer Use Tax Calculator to keep track of all the purchases you made but did not pay sales tax on!!!

 

What is Consumer Use Tax?

When you shop at retail stores and many other business establishments in Alabama, the price you pay for the retail purchases you make usually includes Alabama sales taxes. This tax is calculated at the rate of 4% of the cost of the item(s) you purchased. When you make retail purchases for similar items from businesses located outside of Alabama (mail order, Internet, telephone, while on vacation, etc.), you are responsible, as the consumer, for ensuring that the Alabama sales tax (which is called a "consumer use tax") is paid on these purchases if the business from which you made your purchase did not charge you Alabama sales tax for your purchase(s) and if the items you purchased are delivered to or brought back with you to Alabama.

 

What Retail Purchases are Subject to Alabama Consumer Use Tax?

Examples of retail purchases subject to Alabama sales (or consumer use) tax:

  • Clothing
  • Books
  • Computers
  • Computer Software
  • Furniture
  • Magazine Subscriptions
  • Sporting Goods
  • Jewelry
  • Electronic Equipment
  • CDs, DVDs, Audio & Video Cassettes
  • Photographic Equipment
  • Musical Equipment
  • Automotive Accessories and Parts
  • All other retail purchases subject to Alabama sales taxes

 

Is There A Credit for the Sales Taxes that are Paid to the Other States?

If you were charged a sales tax (other than Alabama sales tax) by the out-of-state business for the item(s) you purchased, you are allowed a credit against your Alabama consumer use tax due for the amount of the sales tax you paid with your purchase, not to exceed 4% of the purchase price.

 

How Do I Compute the Consumer Use Tax?

Use the Consumer Use Tax Calculator to keep track of purchases which are subject to Alabama consumer use tax. Add purchases to your calculator throughout the year and report the total on your Alabama Income Tax return for the year. When filing your Alabama Income Tax return, you only need to report the total amount of tax from your calculator on your return's Consumer's Use Tax Line. Math calculations will be done for you.

 

Consumer Use Tax Calculator Example

You purchased some electronic equipment over the Internet for $2,000 from a business outside Alabama, and you were not charged any Alabama sales tax on your purchase. You also purchased $500 of clothing during the year from various businesses outside Alabama (both over the Internet and while away on vacation), and were not charged Alabama sales tax on your purchases, but did pay $10 in sales taxes in another state on some of the purchases. Based on this example, your Alabama Consumer Use tax would be calculated as follows:

 

Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Column 7
Date of Purchase Description of Goods Retailer Purchase Price AL Tax Due(.04 X Col. 4) Tax Paid to Another Jurisdiction Balance Due (Col. 5 minus Col. 6 but not less than zero)
2/15/02 Electronic Equipment Joe's Electronics.com
2000
80
0
80
6/12/02 Clothing justclothes.com
250
10
0
10
9/25/02 Clothing Macys, NY
250
10
10
0
Alabama Consumers Use Tax Due
90

 

Note: Do not use the worksheet to compute use tax on the following items:

              • automobiles
              • trailers, truck trailers, semi-trailers, travel trailers
              • mobile homes
              • motor boats which must be titled in Alabama

Tax on the above items will be collected at the time of registration by the appropriate county licensing official. For more information regarding Alabama consumer use tax call 334-242-1490.