Registration mess: Alabama agency rules in truckers' favor

| Friday, September 20, 2002

An administrative law judge of the Alabama Department of Revenue has ruled that state residents can continue to register newly-purchased tractor-trailers in other states. The judge added, however, that perhaps Alabama "use" tax would be due on such trucks when they traveled on state roads.

Alabama statute allows a tax-exempt sale of a commercial vehicle that will be taken from the state within 72 hours and registered or titled and first used elsewhere. The DOR sought to limit this privilege to nonresidents.

In its lawsuit against Truck Central of Dothan Inc, Department of Revenue questioned the truck dealer's practice of routinely accepting drive-out exemption certificates from state residents buying trucks they promptly removed from the state and registered in Oklahoma. The DOR alleged the dealer had improperly suggested to customers they might register in Oklahoma and avoid Alabama sales tax.

The judge held that the department's use of "nonresident" in the title of the exemption form and the regulation could not serve to bar Alabama residents from taking advantage of the exemption provided in law, and found that the dealer had accepted the certificates in good faith from its customers, mostly Alabama owner-operators driving for companies based in other states.

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