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Important Notices!
*****  Administrative Law Division Move Effective October 1st  *****
The Taxpayer Fairness Act transfers Revenue's Administrative Law Division to the newly-created Alabama Tax Tribunal; their website is now http://taxtribunal.alabama.gov/.
 
ADOR - Sales & Use Tax - FAQs

FREQUENTLY ASKED QUESTIONS

AM I REQUIRED TO PAY MY TAXES ELECTRONICALLY?

Effective October 1, 2006, Act No. 2006-552 requires payments that are $750 or greater to be made electronically through an Electronic Funds Transfer (EFT) method. EFT ACH Debit is the preferred EFT payment method. EFT ACH Credit payments are allowed if pre-approved by the Department. Click here for more information about making EFT payments.

DOES ALABAMA HAVE A SALES TAX HOLIDAY?

Yes.  Beginning at 12:01 a.m. on Friday August 4, 2006, and ending at twelve midnight on Sunday August 6, 2006, a sales tax holiday is enacted pursuant to Act No. 2006-574, whereby no state sales or use tax is due on "covered items" as defined in the Act and in the Sales Tax Holiday Rule 810-6-3-.65. For each year thereafter, the sales tax holiday begins at 12:01 a.m. on the first Friday in August and ends at twelve midnight the following Sunday. A county or municipality may, by resolution or ordinance adopted at least 30 days prior to the first full weekend of August, provide for the exemption of "covered items" from county or municipal sales or use taxes during the same time period, under the same terms, conditions, and definitions as provided for the state sales tax holiday. A list of the counties and municipalities that have notified the Department of their decision to participate or not participate in the Sales Tax Holiday is provided on our website - click here to access the list.

CAN I FILE MY RETURNS ONLINE FOR FREE?

Yes.  Online filing is FREE of charge. Rule 810-1-6-.12 mandates that the following taxes be filed electronically:  State and Local Sales, Use, Lodging and Rental Taxes, and State Utility, Mobile Telecommunications, Contractors Gross Receipts, Nursing Facility, and Pharmaceutical taxes online.   This includes forms 2100/2105/2110/2115/2120/2125/2620/2610/2410/2310/2320/9501/UPL-4/UPL-5/UPL-6/CTS-2/2810/2800/2510.
To learn more about online filing, click here.

AM I REQUIRED TO FILE MY SALES TAX RETURNS ELECTRONICALLY?

Yes.  Beginning with the October 2003 returns that are due November 20, 2003, business taxpayers are required to file their returns electronically using the new Alabama Paperless Filing & Payment System accessed by the Internet or a 1-800 number.  New Rule 810-1-6-.12 entitled "Taxes Required to be Filed Electronically" mandates electronic filing and lists the tax returns that are required to be filed electronically.

CAN I PAY MY TAX LIABILITY VIA EFT?

Yes.   In 1990, Alabama's Legislature directed the Department to implement an EFT (Electronic Funds Transfer) program. EFT is less costly than manual check processing and is convenient and quick.  For those taxes required to be filed electronically through the Alabama Paperless Filing & Payment System, your EFT ACH debit method payments are made in conjunction with filing your return.  For more information about making these tax payments through the Paperless System, click here.   For more information regarding EFT, click here.

HOW DO I AMEND A RETURN?

If you discover that you have made an error on a sales tax report previously filed with the Department, you should amend the return. You can use a copy of your original return or contact the Department of Revenue at (334) 242-1490 to request a blank form to make the corrections to the applicable period. The report form should be marked "AMENDED" and write the Confirmation Number assigned to the original tax return on the amended return.  Forward the return to the Department with any additional tax, penalty and interest due.

Send amended returns to the following address:  

Alabama Department of Revenue
Sales & Use Tax Division
P. O. Box 327710
Montgomery, AL 36132-7710

This same procedure should be followed for all other tax returns administered by the Sales and Use Tax Section of this Division.

NOTE:  If you need to amend a Self-Administered local return that was filed through the Paperless Filing & Payment System, you should contact the self-administered locality for instructions.  Click here for contact information.

IF I AM NOT REQUIRED TO PAY ELECTRONICALLY, WHERE DO I MAIL MY PAYMENT?

If you are not required to pay electronically and choose to mail a check, tax payments for returns filed through the Alabama Paperless Filing and Payment system should be mailed to:

    Alabama Department of Revenue
    Sales & Use Tax Division
    P. O. Box 327790
    Montgomery, AL 36132-7790

(Effective October 1, 2004, the old Birmingham P.O. Box 831199 address is no longer valid.) All check payments should include the following information: account number, filing period, and Confirmation Number (do not mail a copy of the return filed electronically).

ARE SALES OF GOODS MADE VIA THE INTERNET TAXABLE?

Yes. ON-LINE RETAIL SELLERS LOCATED OUTSIDE ALABAMA: The retail sale of goods made over the Internet that are delivered into Alabama from an out-of-state seller are treated the same as the retail sale of tangible personal property made through more traditional channels, with the same “nexus” rules applying to both. A retail vendor has “nexus” in Alabama if they have a physical presence in Alabama, such as a retail store, warehouse, inventory, or regular presence of traveling salespeople or agents, or has established remote entity nexus. If the retail vendor has nexus in Alabama, the tax reporting responsibility lies with the retail vendor to register with the ADOR to charge, collect and remit the appropriate Sellers Use Tax to the ADOR (Local sellers use taxes also apply and should also be charged, collected and remitted to the appropriate administering authorities). If the retail vendor does not have nexus with Alabama, the tax reporting responsibility passes to the consumer/purchaser and they would be responsible for self-assessing the use tax and remitting it via a consumers use tax return to the ADOR and to the appropriate administering authorities.  (To report use tax to the state, file and pay the Consumers Use Tax Return electronically through the Alabama Paperless Filing & Payment System.  If you do not have a valid consumers use tax account number, and only need to report and pay on an occasional basis, click here for a downloadable return.)   However, please note that some retail vendors that do not have nexus in Alabama elect to register with the ADOR on a voluntary basis to charge, collect and remit the use tax to the ADOR as a convenience to their customers.

ON-LINE RETAIL SELLERS LOCATED IN ALABAMA: The retail sale of goods made over the Internet by Alabama retailers to Alabama customers are subject to Alabama Sales Tax. The tax reporting responsibility lies with the Alabama retail vendor to charge, collect and remit the Sales Tax on such sales, as these sales are treated the same as the retail sale of tangible personal property made through more traditional channels. Local sales tax or use tax also applies and should be remitted to the appropriate administering authorities.

IF ALABAMA RESIDENTS PURCHASE ITEMS THROUGH MAIL ORDER SALES OR OTHER DIRECT MARKETING ALTERNATIVES, ARE THESE SALES TAXABLE?

Yes. Retail sales of tangible personal property delivered into Alabama from an out-of-state location are subject to Alabama use tax, regardless of the method of ordering the item - i.e. via mail-order catalogs, cable tv shopping, the Internet, by telephone, etc. If the out-of-state seller has “nexus” in Alabama, the tax reporting responsibility lies with the retail seller to register with the ADOR to charge, collect and remit the appropriate tax to the ADOR. (A retail vendor has “nexus” in Alabama if they have a physical presence in Alabama, such as a retail store, warehouse, inventory, or regular presence of traveling salespeople or agents, or has established remote entity nexus.) If the retail seller does not have nexus in Alabama, the tax reporting responsibility passes to the consumer/purchaser and they would be responsible for self-assessing the use tax and remitting it to the ADOR via a consumers use tax return. (You can download a consumers use tax return by clicking here.) However, please note that some retail vendors that do not have nexus in Alabama elect to register with the ADOR on a voluntary basis to charge, collect and remit the use tax to the ADOR as a convenience to their customers.

WHAT KINDS OF TAXES ARE ADMINISTERED BY THE SALES & USE TAX DIVISION?

The Sales & Use Tax Division administers, collects and enforces over 38 different taxes. The Sales & Use Tax Administration Section of our Division is charged with the responsibility of administering, collecting and enforcing those taxes as shown below. Click here for the taxes the Business & License Tax Administration Section is charged with the responsibility of administering, collecting and enforcing.

The following is a list of the taxes administered, collected and enforced by the Sales & Use Tax Administration Section:

    Sales Tax
    Sellers Use Tax
    Casual Sales & Use Tax
    Consumers Use Tax
    Lodgings Tax
    Rental or Leasing Tax
    Contractor's Gross Receipts Tax
    Drycleaning Trust Fund Fee
    Utility Gross Receipts Tax
    Utility Service Use Tax
    2.2% Utility License Tax
    Hydroelectric Kilowatt Hour Tax
    Alabama Nursing Facilities Privilege Tax
    Pharmaceutical Providers Tax
    Mobile Telecommunications Service Tax
SALES TAX.

Sales tax is a privilege tax imposed on the retail sale of tangible personal property sold in Alabama by businesses located in Alabama. The tax is collected by the seller from their customer and remitted directly to the state. All sales of tangible personal property are retail sales except those defined as wholesale sales.

WHOLESALE SALES.

Wholesale sales are sales of tangible personal property to licensed retail merchants, jobbers, dealers, or other wholesalers for resale. It does not include sales to users or consumers that are not for resale. The seller must maintain the sales tax number or exemption number for these customers.

WHEN IS THE SALES TAX DUE?

The sales tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month for the previous month's sales. However, a taxpayer may elect to file and pay state sales tax on a calendar quarter basis when the total state sales tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state sales tax liability during the preceding calendar year is $10 or less, the taxpayer may file state sales tax on a calendar year basis. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

IF THE 20TH FALLS ON A WEEKEND OR HOLIDAY, WHEN IS THE DUE DATE?

The return must be submitted on or before the next working day to be timely filed.

IS THE SELLER ALLOWED A DISCOUNT FOR TIMELY FILING AND PAYING THE SALES TAX DUE?

Yes. A discount is allowed if the tax is paid before the 20th day of the month in which the tax is due. The sales tax discount consists of 5% on the first $100 of tax due, and 2% of all tax over $100. Please note, however, that the monthly discount may not exceed $400.00.

IS THERE A PENALTY IMPOSED FOR NOT TIMELY FILING AND PAYING THE SALES TAX DUE?

Yes. Penalty and interest is due if the tax is paid after the 20th day of the month in which the tax is due. The Failure to Timely File Penalty is 10% of the tax required to be paid or $50.00, whichever is greater. The Failure to Timely Pay Penalty is 10% of the tax required to be paid. Interest is due at the current rate. Click here for the interest rates.

WITHDRAWALS.

Withdrawals are items purchased at wholesale which are withdrawn for use. A withdrawal would include any items that are purchased tax free for resale, but are withdrawn from inventory and used by the owner/employees instead of being sold. Withdrawals are subject to tax and the cost of these items should be reported on the sales tax return. A withdrawal also includes the cost of items withdrawn from inventory and used by the seller and/or employees in making additions to real property.

WHAT ARE THE STATE SALES TAX RATES?

1.5% of the net difference paid for farm machinery; this rate also applies to the gross receipts from sales of machines, parts, and attachments for machines used in manufacturing, processing, compounding, mining, and quarrying tangible personal property.
2% of the net difference paid for new and used automotive vehicles, truck trailers, semi-trailers, and manufactured homes.
3% of the retail sales price of food for human consumption sold through coin-operated vending machines.
4% of the gross proceeds of sales of all tangible personal property, other than that listed previously and specifically exempted by law, and the gross receipts from places of entertainment or amusements.

LOCAL SALES TAX.

In addition to the State Sales Tax, local sales taxes are also due, and these rates vary. The State of Alabama administers over 200 different city and county sales taxes; however, we do not administer all county or city sales taxes. Therefore, be advised to contact all counties and municipalities in which you do business in order to determine if you should register with them to collect their local tax. The local tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month for the previous month's sales. However, a taxpayer may elect to file and pay state-administered local sales tax quarterly when the total state sales tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the Department no later than February 20 of each year. Also, if a taxpayer's total state sales tax liability during the preceding calendar year is $10 or less, the taxpayer may file local sales tax on a calendar year basis. The discount for local sales tax is the same as for State sales tax. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

SELLERS USE TAX.

Sellers use tax is imposed on the retail sale of tangible personal property sold in Alabama by businesses located outside of Alabama which have no inventory located in Alabama, but are making retail sales in Alabama via sales offices, agents, or by any significant recurring contact or "nexus" with Alabama.The tax is due monthly, with returns and remittances to be filed on or before the 20th of the month for the previous month's sales. However, a taxpayer may elect to file and pay state use tax quarterly when the total state use tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state use tax liability during the preceding calendar year is $10 or less, the taxpayer may file state use tax on a calendar year basis. No discounts apply for timely filing. The tax rates due are the same rates as for State sales tax. There may also be city and/or county sellers use tax due; these rates vary. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

LOCAL SELLERS USE TAX.

The local sellers use tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month for the previous month's sales. However, a taxpayer may elect to file and pay state-administered local use tax quarterly when the total state sales tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year and the total state use tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state sales tax liability during the preceding calendar year is $10 or less, the taxpayer may file local use tax on a calendar year basis. No discounts apply for timely filing. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

CONSUMERS USE TAX.

The consumers use tax is imposed on tangible personal property brought into Alabama for storage, use, or consumption in the state when the seller did not collect seller's use tax on the sale of the property. The tax rates due are the same rates as for sales tax. The tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month following the month in which the purchase was made. However, a taxpayer may elect to file and pay state use tax quarterly when the total state use tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state use tax liability during the preceding calendar year is $10 or less, the taxpayer may file state use tax on a calendar year basis. No discounts apply for timely filing. The tax rates due are the same rates as for State sales tax. There may also be city and/or county consumers use tax due; these rates vary. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

LOCAL CONSUMERS USE TAX.

Many cities and counties have use tax requirements patterned after the State law. Purchases from in-state vendors located outside these cities and counties for use within could be subject to their use tax. These rates vary. If a local city or county sales/use tax is paid under a requirement of law, no other additional local tax is due for the subsequent use in another city or county. The local consumers use tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month following the month in which the purchase was made. However, a taxpayer may elect to file and pay state-administered local use tax quarterly when the total state sales tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year and the total state use tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state sales tax liability during the preceding calendar year is $10 or less, the taxpayer may file local use tax on a calendar year basis. No discounts apply for timely filing. Note:  If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

RENTAL TAX.

Rental tax is a privilege tax levied on the lessor for the leasing or renting of tangible personal property. The gross receipts, including any rental tax invoiced, from the leasing or rental of tangible personal property are subject to the State rental tax at the following rates:

    Automotive vehicles ...............1.5%
    Linens/Garments....................2.0%
    Other.....................................4.0%

This tax is due on "true leases" (those leases in which the title to the property is retained by the lessor at the end of the lease agreement or when the lessee has an option to purchase the item at the end of the lease agreement for the fair market value of the item). "Conditional sales leases" (those in which the title of the property is transferred to the lessee at the end of the lease agreement or when the lessee has an option to purchase the item at the end of the lease agreement for $1 or a nominal amount) are subject to sales tax. When an operator is provided with the leased equipment the transaction is considered a service rendered and is not subject to rental tax. Rental tax returns and remittances are due monthly on or before the 20th day of the month for the previous month's rentals. However, a taxpayer may elect to file and pay state rental tax quarterly when the total state rental tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state rental tax liability during the preceding calendar year is $10 or less, the taxpayer may file local rental tax on a calendar year basis. No discounts apply for timely filing. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

LOCAL RENTAL TAX.

Local rental tax is levied in the same manner as the State rental tax; these rates vary. Local rental tax is due monthly with returns and remittances to be filed on or before the 20th day of the month for the previous month's rentals. However, a taxpayer may elect to file and pay state-administered local rental tax quarterly when the total state rental tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the ADOR no later than February 20 of each year. Also, if a taxpayer's total state rental tax liability during the preceding calendar year is less than $10, the taxpayer may elect to file state rental tax on a calendar year basis. No discounts apply for timely filing. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

LODGINGS TAX.

The lodgings tax is a privilege tax on persons, firms, and corporations engaged in renting or furnishing rooms, lodgings, or other accommodations to transients for periods of less than 180 days of continuous occupation and applies to all charges for providing such accommodations. This tax also applies to charges for personal property used or furnished in such rooms or lodgings. Some examples of entities subject to this tax are those entities engaged in the operation of: hotels, motels, lodges, inns, tourist courts, tourist homes, camps, trailer courts, or any other place where rooms, apartments, cabins, sleeping accommodations, house trailer parking accommodations or other accommodations are made available to travelers, tourists, or other transients. The tax is due monthly with returns and remittances to be filed on or before the 20th day of the month for the previous month's lodgings. A discount is allowed if the tax is paid before the 20th day of the month in which the tax is due. The lodgings tax discount consists of 5% on the first $100 of tax due, and 2% of all tax over $100. Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

LODGINGS TAX RATES.

The state lodgings tax rate is 5% of the charges for accommodations in counties of the geographic region comprising the Alabama Mountain Lakes area (those being Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan and Winston counties). In all other Alabama counties, the state lodgings tax rate is 4% of the charges for accommodations.

LOCAL LODGINGS TAX.

The applicable local lodgings tax rate should be charged in addition to the State lodgings tax; these rates vary. Local lodgings tax is due monthly with returns and remittances to be filed on or before the 20th day of the month for the previous month's lodgings. The discount for local lodgings tax is the same as for the State lodgings tax. Note:  If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

WHAT IS CONTRACTORS GROSS RECEIPTS TAX?

Contractors Gross Receipts Tax is a privilege tax imposed on persons, firms, and corporations engaged in the business of contracting to construct, reconstruct, or build public highways, roads, bridges, streets, or tunnels for the state of Alabama. The contractors gross receipts tax rate is 5% and applies to all payments made to the contractor or contract assignee whether the payments are made pursuant to a contract, purchase order, supplemental agreement, change request or other arrangement to perform work. These contracts may include but are not limited to the following:

    Earthwork
    Bases
    Surfacing
    Pavements
    Structures
    Incidentals such as:
      Traffic control devices
      Highway lighting
      Materials
      Bridge scouring and painting
      Installation or repair of overhead signs
      Installation of structure footings
      Sign rehabilitation
The contractors gross receipts tax does not apply to the following:
    Contracts between the contractor and the federal government when the state of Alabama is not listed as a joint party.
    Contracts between the contractor or contract assignee and the city, town, or county when the state of Alabama is not listed as a joint party.
    Contracts to construct, reconstruct, or build rest areas or welcome stations.
    Contracts that do not include or require the construction, reconstruction, or building of a public highway, road, bridge, street, or tunnel. (Example: mowing and/or landscaping, parking lots, fencing, etc.)
    Additional payments, which may cause an increase in the contract price, due to escalations in the cost of fuel, material, and/or labor.
The tax is due monthly with returns and remittances to be filed on or before the 20th day of the month following the month in which the payment was received by the contractor or contract assignee. A discount is allowed if the tax is paid before the 20th day of the month in which the tax is due. The contractors gross receipts tax discount consists of 5% on the first $100 of tax due, and 2% of all tax over $100. The discount may not exceed $400.00 Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

OVER COLLECTIONS LAW.

According to Section 40-23-26(d), Code of Alabama 1975, any over collection of sales tax by a retailer from the customer must be paid to the State unless such over collection results solely from rounding the correct amount of tax upward to the nearest cent. Over collections of local sales tax must be reported and paid on your local sales tax return in the same manner as over collections are to be reported on your State sales tax return.

HOW DO I APPLY OR REGISTER FOR A SALES TAX NUMBER?

To apply or register for a sales tax number, you may go to http://revenue.alabama.gov/salestax/register.html. Read the Instructions prior to registering so that you will be prepared with the information required for registering. When you are done, click on the I Agree button at the end of the process and you will receive a confirmation number. If there are no problems with the application and you have selected the e-mail option, you should receive your account number within two to three days. A license will be mailed to you later.

If you prefer to apply through the mail, you may complete the Combined Registration/Application/Change Form, (form COM:101). Click here to download the COM:101 form. You may also contact the Alabama Department of Revenue, Central Registration Unit, P.O. Box 327100, Montgomery, AL 36132-7100 (334) 242-1170, for the required form. Please mail the completed application to this address. Please allow 8 to 14 days for notification of account number.

Other account numbers that you may need, such as Rental Tax, Lodgings Tax, Sellers Use Tax, Consumers Use Tax, Mobile Communications Services Tax, Utility Service Use Tax, Utility Gross Receipts Tax, Utility Excise Tax, Pharmaceutical Provider’s Tax, Alabama Nursing Home Privilege Tax and Income Tax Withholding, can be applied for using the online process.

Click here to download various Tax Brochures and Pamphlets.

AM I REQUIRED TO REGISTER FOR A SALES TAX NUMBER IF I ONLY MAKE WHOLESALE SALES?

No. However, you can contact the Sales and Use Tax Administration Section, or any Taxpayer Service Center to determine if a Certificate of Exemption, Consumer's Use Tax number, or other registration is required.

WHAT OTHER LICENSES AM I REQUIRED TO HAVE?

You may also be required to purchase a State/County Business License (i.e. Privilege License). Please contact the Judge of Probate's office in the county in which your business is located. You may also be required to purchase a City Business License from the City in which your business is located. For more information related to Business Licensing click here.

DO I NEED TO FILE A SALES AND/OR SELLERS USE TAX RETURN FOR A MONTH IN WHICH I HAD NO SALES?

Yes. Once an account has been established for your business, no matter what type of tax account you have, a tax return must be filed for each month even though no tax is due.

ARE NON-PROFIT ORGANIZATIONS EXEMPT FROM SALES AND USE TAXES?

No. Charitable and nonprofit organizations and institutions, per se, have no special exemption from the sales and use taxes. However, some non-profit and charitable organizations may be exempt from sales and/or use taxes by special Acts passed by the legislature. (See Rule 810-6-3-.07.05)

ARE CHURCHES EXEMPT FROM SALES AND USE TAXES?

No. Religious organizations and institutions, including churches, church hospitals, etc., are not exempt from the payment of sales and use taxes.

IF I HAVE SEVERAL LOCATIONS IN ALABAMA, DO I NEED SEPARATE SALES TAX NUMBERS FOR EACH LOCATION?

No. If the legal ownership of the locations is the same, only one sales tax number will be assigned. Sales should be combined and reported on one return.

WHAT TYPE OF SALES ARE MADE WHERE NO SALES TAX IS DUE?

Sales of Exempt Items: Some of the more common items which are exempt are: prescription drugs, gasoline and motor oil (kerosene and fuel oil are taxable), fertilizer/insecticides/fungicides when used for agricultural purposes, seeds for planting purposes, feed for livestock and poultry (not including prepared food for dogs and cats), baby chicks and poults, livestock, sales to the U.S., State of Alabama and other governmental agencies of the State of Alabama, labor to repair or install property is exempt as long as it is billed as a separate item on the customer's invoice (labor to fabricate an item is not exempt). Note: cigarettes and beer are not exempt from sales or use tax.

Sales to Exempt Organizations:  Sales made directly to the federal government, the State of Alabama and counties and cities within the State; sales made directly to Schools (not daycares) within the State; sales made to City and County owned and operated hospitals and nursing homes; sales made to some non-profit agencies that have been specifically exempted by the Alabama Legislature - examples include but are not limited to Alabama Sheriffs Boys Ranch, Boy Scouts & Girl Scouts of America. Note: Not all non-profit organizations are exempt.

Sales Paid For With Food Stamps:  The exemption applies only to items which are actually purchased with food stamps. All other purchases by food stamp program participants remain subject to sales tax.

Wholesale Sales (Sales for Resale):  Sales made to licensed retail merchants, jobbers, dealers, or other wholesalers for resale.

IF I CHANGE THE NAME OF MY BUSINESS, WILL MY TAX NUMBER CHANGE?

If you are changing the trade name or "doing business as" name of your business, your sales tax number will not change - you will need to contact the ADOR at 242-1490 or you may the change so that a notation may be made regarding the change in trade name or “doing business as” name. However, if the change is deemed to be a change in legal entity, new numbers will be assigned. For example, if you change from a proprietorship to a partnership or a corporation, this is a change in the legal entity. A new Application will be required and a new sales tax number will be assigned. You may complete the application electronically at: http://revenue.alabama.gov/salestax/register.html

HOW DO I CHANGE THE MAILING ADDRESS OF MY BUSINESS?

If you are merely changing the mailing address - you will need to contact the ADOR at 334-242-1490 or you may the change.

ARE FREIGHT CHARGES TAXABLE?

According to Rule 810-6-1-.178, if delivery is made in the sellers own vehicle, or in equipment leased by him, the transportation charges are subject to sales or use tax. If delivery is made by common carrier or the U.S. Postal Service, the transportation charges shall not be subject to sales or use tax if billed as a separate item and paid directly or indirectly by the purchaser. To be excluded from the measure of tax, these transportation charges must be separate and identifiable from other charges.

WHO DO I CONTACT TO OBTAIN AN ABATEMENT?

Abatements are authorized to be granted by the governing body of a: (A) municipality for private use industrial property located within the corporate limits of the municipality or within the police jurisdiction of the municipality; (B) county for private use industrial property located in the county and not within a municipality or its police jurisdiction, unless consented to by resolution of the governing body of the municipality; or (C) a public industrial authority for private use industrial property located within the jurisdiction of the public industrial authority.

ONCE AN ABATEMENT OF SALES AND USE TAXES HAS BEEN GRANTED, WHAT IS THE NEXT STEP?

The private user should send a copy of the executed abatement agreement, a certified resolution by the public body, the combined application for abatement (Form CO:CAA) and the certificate of exemption application form (Form ST:EX-A2) to the Department of Revenue at the following address within 90 days after the abatement is granted: Alabama Department of Revenue, Commissioner's Office, ATTN: Abatement Program Director, P.O. Box 327001, Montgomery, AL 36132-7001. For more information regarding abatements, click here.

WHAT QUALIFIES AS A MAJOR ADDITION FOR ABATEMENT PURPOSES?

Any addition to a qualifying existing industrial development property where the amount to be invested equals or exceeds 30% of the original cost of the existing land, building and equipment or $2,000,000.

For more information, see our Brochures & Pamphlets.