| Finance Department - Tax Information - Tax Notice July 2008 |
Information on this site is intended only for general guidance on tax matters. Taxpayers are strongly encouraged to consult with their advisors or ask city representatives about the specific effect of local taxes on their activities.
Finance Department Tax Contacts
| By Phone |
(256) 427-5070 or (256) 427-5068 |
| By Fax |
(256) 427-5064 |
| By Email |
FinanceTax@hsvcity.com |
| By Mail |
City of Huntsville Finance Department
P.O. Box 308, Huntsville, AL 35804-0308 |
| In Person |
City of Huntsville Finance Department
308 Fountain Circle, 4th floor, Huntsville, AL 35801 |
Sales Tax Holiday 2008
The City of Huntsville has adopted the State of Alabama sales tax holiday effective August 1, 2008 through August 3, 2008. Sales of qualifying merchandise will be exempt from City sales tax during this period. For details on qualifying merchandise, please see the State of Alabama sales tax website at
The city ordinance adopting this is available at:
Businesses are required to keep records clearly showing that the items on which is tax was not collected comply with this ordinance.
Tobacco Tax
The City adopted a tax on tobacco products on January 1, 2004. This tax applies to all tobacco products sold inside the city, and requires a city tobacco stamp on all cigarette packages sold inside the city. The products and taxes are as follows:
| Product |
Tax |
Reported |
| Cigarettes |
Ten (10) cents per package |
Stamp |
| Other tobacco |
Ten (10) cents per package |
Monthly return |
| Cigars |
Three (3) cents each |
Monthly return |
While the tobacco tax ordinance and related rules require wholesalers to pay the tax, retailers are responsible for having a stamp affixed to all cigarette packages, and risk confiscation of unstamped products. The tobacco tax ordinance and rules are available at:
Tax Return E-Filing
Taxpayers save considerable time and expense by filing and paying certain city and state taxes electronically, including the City of Huntsville. Taxpayers are encouraged to visit the online filing website at Tax Return E-Filing or visit the Alabama Department of Revenue website at Alabama Department of Revenue
City of Huntsville Addresses
Transactions occurring inside the corporate limits of Huntsville are those that are subject to tax according to applicable city law. It is the TAXPAYER'S RESPONSIBILITY (in the case of retail sales, it is the SELLER'S RESPONSIBILITY) to determine whether a transaction occurs in Huntsville.
IMPORTANT NOTE: U.S. Post Office addresses do not indicate Huntsville's geographic boundaries.
To determine the location of a transaction, you may refer to the Huntsville Address Locator, which is a current listing of all addresses inside Huntsville. For locations not having a postal address (such as new real estate developments), you should contact the City Planning Department for assistance at (256) 427-5100.
Businesses Providing Services
Many businesses primarily sell services, not merchandise to their customers, such as health care and dental professionals, attorneys, accountants, engineers, appraisers, software consultants, U.S. Government contractors, architects, and real estate agents. Although you may not be required to collect sales tax, it is very likely you are required to pay city use tax on materials, supplies, computer equipment, and other property used in your business, whether provided to your customers or not. Please refer to the other information on this website concerning use tax.
Automotive Vehicle Dealers
Automotive vehicle dealers are required to collect sales tax on the sale of all vehicles in the city. This does not apply to vehicles delivered outside Huntsville, "delivery" being defined by Alabama law. If a dealer delivers a vehicle outside Huntsville, the dealer is required to complete an Certificate of Exemption/Out-of-City Delivery Form ("City Form") for the sale to be exempt. The City Form is not required if the sale complies with the 72-hour drive-out exclusion under Alabama law for which the proper form is completed and retained by the dealer. The City Form is available at Automotive Delivery Form.
The matter of delivery outside of Huntsville is complex and must comply with Alabama law concerning what constitutes delivery and passage of title. The DEALER IS RESPONSIBLE for determining whether a delivery location is inside or outside the city, and may refer to the Huntsville Address Locator for reference.
For the exemption to be accepted by the city, the dealer must submit the original or copy of all City Forms executed for the tax reporting period with the tax return for the period.
IMPORTANT NOTE: The City Form does not apply to sales to individuals or businesses having a Huntsville address according to the then applicable Huntsville Address Locator, regardless of the point of delivery. If such a sales is claimed as exempt by a dealer and the city discovers such, AND the city discovers the Madison County License Director did not collect the city sales tax from the buyer upon registration of the vehicle, the city will assess the sales tax on the sale to the dealer, plus a penalty for failure to pay the tax timely.
Also, if the city discovers from the buyer that the vehicle was not delivered outside the city, contrary to the City Form, the city will assess the sales tax on the sale to the dealer, plus a penalty for failure to pay the tax timely.
The city will assess sales tax on the sale to the buyer if the city finds the dealer properly exempted the sale but for other reasons finds the buyer owes the tax.
Business Records
All individuals and entities having a city business license are required by law to keep records that clearly show all transactions subject to city privilege licenses and taxes. This includes, but is not limited to records showing:
All income of the business, whether by cash, check, credit or property.
Customer invoices establishing the delivery location of business merchandise and taxes collected.
Customer sales tax exemption documents, when applicable.
All banking activities.
All purchases by the business, whether by cash, check, credit or property.
Invoices from vendors.
Payroll records.
Real and personal property owned by the business.
Failure to keep proper records and make them available upon the city's request constitutes a misdemeanor offense for which the city may issue a citation for observed violations. You are strongly encouraged to consult with your advisors about the law's requirements, or contact city for more information. Retail businesses receiving primarily cash are especially encouraged to establish proper recordkeeping procedures to avoid city penalties.
Use Tax
Use tax is traditionally the most confusing tax, and should be of particular interest to individuals and businesses engaged in construction, contracting, and services, but it is very likely that every person and business is subject to use tax to some degree.
Use tax, at the same rates as sales tax, becomes due when the user and consumer of taxable goods does not pay tax to the seller, or pays tax to an seller that is not registered to collect City of Huntsville tax. Use tax is due on purchases made by Huntsville residents and businesses from another city or state which are not taxed.
Generally, if you would be required to pay sales tax on goods purchased inside Huntsville, but you purchase them outside Huntsville and do not pay local sales tax, you are probably subject to use tax and must report and pay it to the city.
You are strongly encouraged to consult with your advisors or ask city representatives about how use tax applies to your activities.
U.S. Government Contractors
Materials and supplies used and consumed within the city by government contractors in the performance of their contracts may be subject to city sales and use tax, even though the cost is ultimately paid by the U.S. Government. Passage of title to the U.S. Government does not necessarily affect local tax treatment. The sales and use tax effect on transactions involving government contracts is particularly complex and requires an assessment of the facts and circumstances of each situation. Contractors should consult with their advisors and government tax representatives for assistance in the proper application of law to their business transactions.
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