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In AL, does nexus in one city create nexus in every local jurisdiction?

Full Question: AL has numerous self-administered jurisdictions. My client is located in FL. Client will occasionally provide labor (through their vendors) to customers in AL for installation and repairs. Client also will sell and ship parts alone (no labor). Question: If the client establishes nexus in one city due to sending a vendor to provide services on the customer's site, does that mean the client automatically has nexus in every jurisdiction in AL, and therefore charges both state and local (sellers use) tax on every sale they make within the state?

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Answer:

Diane Yetter photoAlabama is one of the most challenging states when it comes to determining nexus due to the fact that there are both state administered localities and home rule (self administered) localities. The general rule in the state is that once you have established nexus with the state due to your presence in the state providing service, then you are required to collect the appropriate tax in all authorities administered by the state including all localities that the state administers. If you establish nexus in a home rule locality then you have a tax collection responsibility for that home rule locality as well as any higher level home rule authorities that share the boundaries. For example, if you establish nexus in Birmingham, Alabama which is a home rule city, you would be required to collect the state level tax and remit it to the state of Alabama and then collect Jefferson County home rule tax and remit that to the county administrator as well as Birmingham city tax and remit that to the appropriate administrator. This would apply for all sales into the jurisdiction including part only sales made from your location in Florida. Since the activities that create nexus differ by locality, you are advised to review each individual locality for their nexus creation rules.

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