Alabama Wholesale to Retail Accountability Program

By Laurel Brown

New in 2018, the Alabama Wholesale to Retail Accountability Program (WRAP) requires the following information to be provided to the Alabama Department of Revenue:
“Duplicate information reporting from reporting entities as defined in Section 6050W of the Internal Revenue Code (1099K’s) are due to the State of Alabama before April 30 each year beginning April 30, 2018.”

The good news is that if you have not had to report a 1099K before, this likely won’t affect you. Affected companies are banks, credit card companies, and other similar entities who in the past have been responsible for filing 1099K’s with the IRS.
“Beginning July 1, 2018, distributors of beer and wine in Alabama must electronically file monthly information reports on sales for resale purposes made within this state on which sales or use tax was not collected from retailers.”

To elaborate on this new requirement, wholesalers are required to file a monthly informational report for any sales tax-exempt sale of any beer or wine sales. This “includes a wholesale club or warehouse club that sells tobacco/alcohol under a membership,” – meaning Costco and Sam’s Club are subject to these additional reporting requirements in Alabama.  Furthermore, wholesalers are now required to file sales tax returns, which will net to $0. This allows the Department to cross-reference information submitted by the retailer.
How does this affect your restaurant, hotel, or other businesses? If you only buy beer or wine tax-exempt, you don’t have anything additional to report. However, if there are discrepancies among what the wholesaler and you report, the Department will go through all of your purchases. While this doesn’t necessarily mean that you are doing anything wrong, it does come with its own set of headaches and stress that you would probably like to avoid.
Please note that this report is due on/before the 20th day of the month following the sale.
Effective July 1, 2018, sellers of tobacco products already filing an information report will be required to provide additional information on that report.

October 1, 2019, information on municipal business privilege license applications is to be submitted monthly to the department.”

More information can be found by visiting https://revenue.alabama.gov/sales-use/wrap/.

Contact Hall Albright Garrison & Barnes to see if this new program affects your business. Our staff has the experience and knowledge to help you navigate through these new reporting requirements so that you can focus on running your business.