Revenues, Taxes, and Licenses
Revenues, Taxes, and Licenses:
The City of Oxford administers and self-collects the following taxes: lodging, wine, liquor, tobacco, and gasoline. The State of Alabama collects the following taxes for the City of Oxford: sales, seller's use, consumer's use, amusement, and rental. The general sales/use tax rate is 5% and the automotive rate is .5%. Returns are due by the 20th of each month for the preceding month. State rules are followed on definitions, exceptions, exemptions and deductions. For additional tax information please call (256) 831-3183 or fax (256) 835-6110.
OVERVIEW OF CITY OF OXFORD TAXES
Sales Tax (For Businesses Located in Oxford)
Sales tax is due on the sale of tangible personal property and is due from the consumer (customer). If a business is engaged in selling tangible personal property, they should add the tax to the sales invoice and collect the sales tax from the customer at the time of purchase.
Sales tax is also due on the gross receipts from places of amusement or entertainment.
The general sales tax rate in the City of Oxford is 10% (4% State of Alabama, 1% Calhoun County, and 5% City of Oxford). If applicable, businesses may check with each agency to obtain their automotive, farm equipment and manufacturing rates. In the City of Oxford all sales are taxed at the City’s general rate of 5%, with the exception of automotive vehicles at .5% City tax.
Common exemptions to sales tax are the following type sales:
These are sales to a licensed retail merchant, jobber, dealer or others who are purchasing for resale. It is the seller’s responsibility to obtain and keep on file the purchaser’s valid sales tax number or exemption number. The State of Alabama Department of Revenue can verify that a number is valid.
Sales of Tax Exempt Items
Certain items are specifically exempt from sales tax. Examples – lubricating oil, gasoline, livestock feed and other exemptions. Please verify whether an item is exempt before making the sale.
Sales to Tax Exempt Organizations
1. The State of Alabama, counties and cities within the State are exempt from paying tax on their purchases. Effective 10/1/2000, sales to contractors and subcontractors of personal property to be incorporated into realty pursuant to a contract with an exempt governmental agency are exempt from tax.
2. Some organizations are exempt by special acts of the Legislature. A listing of these is
found in rule number 810-6-3-.07.05. Some examples of these organizations are the Alabama Sheriffs Boys Ranch, Boy & Girl Scouts, YMCA and YWCA. Churches are not tax exempt, and not all non-profit organizations are tax exempt. If there is a question about exemption, call to verify before making the sale.
Out of State Deliveries/Shipments
Generally, businesses are not required to collect tax on deliveries/shipments of retail sales made outside this State.
NOTE: Sales tax is due the City of Oxford on merchandise that is picked up by the purchaser or the purchaser’s agent from a Oxford location or on merchandise that is delivered to the purchaser at a location in the City of Oxford. Do not remit sales tax to the City of Oxford on sales that are shipped or delivered outside the City of Oxford.
Withdrawals from inventory for use or installation – Sales tax applies to withdrawals from inventory on purchases made tax free which are later withdrawn from inventory for use by the business or for installation in fulfilling a contract to make additions, improvements or alterations to real property. The measure of sales tax is the cost (price paid) for the item withdrawn by the person making the withdrawal. The tax is due at the time and place of withdrawal, regardless of the place where used. If this type activity is applicable to a business in Oxford, the sales tax is due Oxford on all withdrawals regardless of the place used or installed.
The following type businesses should obtain a clear understanding of the tax laws pertaining to their business activities:
1. Dual businesses that make both retail sales and withdrawals from inventory for installation to improve or alter real property.
2. Businesses that make retail sales and also provide labor in conjunction with those sales.
3. Manufacturers that make sales and also install the manufactured product.
4. Any business that does not have a clear understanding of their tax liability.
Seller’s Use Tax (for Businesses Located Outside Oxford)
If a business is located outside the City of Oxford but makes sales that are delivered/shipped into Oxford, it should charge the appropriate City of Oxford seller’s use tax if it has nexus with the City of Oxford. The rates are the same as outlined above for sales tax.
Consumer’s Use tax (for Businesses Located in Oxford)
Use tax is the counterpart of sales tax. Oxford use tax applies to all tangible personal property purchased at retail that is used, stored or consumed in Oxford, on which the vendor did not collect Oxford tax at the time of purchase. The liability for use tax falls on the purchaser. If the vendor did not collect the City of Oxford tax at the time of purchase, it is the responsibility of the purchaser to report and pay the tax due.
On purchases made outside Oxford but shipped or delivered into Oxford, the vendor may not charge the FULL RATE of tax. All purchase invoices should be checked for compliance with the sales and use tax laws. The collective general rate of tax is 8% (State 4%, and City of Oxford 4%). If the vendor did not charge the City of Oxford tax, the business will be required to pay the tax directly to the City of Oxford.
If purchases are made in the City of Oxford, the vendor should add 8% sales tax to the invoice and collect the tax at the time of purchase, unless the purchase is specifically exempt by law.
It is the business’s responsibility to check all purchase invoices for compliance with the sales and use tax laws.
NOTE: Consumer’s use tax does apply to purchases made via telephone, mail-order, the Internet, etc. The vendor does not usually collect the City of Oxford tax on these purchases.
There are certain exemptions from the use tax law. If there is a question on exemption from use tax, please inquire.
Use tax returns and the remittance of any tax due the City of Oxford must be filed with the City of Oxford.
Please inquire for additional information regarding consumer’s use tax. The above is a very brief overview, and more information may be required for a particular type of business transaction.
Rental tax is a privilege tax levied on the lessor of tangible personal property. The tax is on the gross receipts (including any tax invoiced) from the rental or leasing of any tangible personal property subject to the rental tax. The City of Oxford general rental tax rate is 4%, and the automotive rate is 2%. The State of Alabama and Calhoun County also levy rental tax.
Lodging tax is a privilege tax levied on persons, firms, or corporations engaged in renting or furnishing rooms, lodgings, or other accommodations to transients for periods of less than 180 days of continuous occupation. The tax applies to all charges in conjunction with providing such accommodations. The City of Oxford lodgings tax rate is 6%. The tax is due by the 20th day of the month following the reporting period in which the tax is collected. The State of Alabama and Calhoun County also levy lodgings tax.
The City of Oxford levies a .01 per gallon tax on the sale of gasoline, diesel fuel and all other motor fuels for on-road use. Please call the City of Oxford Tax Office to register to remit this tax.
The City of Oxford levies a 3% liquor tax on the purchase price of liquor by each retailer, distributor or club located in the City of Oxford. Please call the City of Oxford Tax Office to register to remit this tax.
Click here for a Lodging, Sales, Use, and Rental Tax Report form.