The Internet Tax Freedom Act of 1998 implemented a moratorium preventing state and local governments from taxing internet access, or imposing multiple or discriminatory taxes on electronic commerce. Following the initial moratorium, a number of laws amended and extended the moratorium until it became permanent on February 24, 2016, as part of the Trade and Facilitation and Trade Enforcement Act of 2015.
The definition of “internet access” includes:
(a) a service that enables users to connect to the internet to access content, information, or other services offered over the internet;
(b) the purchase, use, or sale of telecommunications by a provider of a service described in (a) to the extent those telecommunications are purchased, used, or sold to provide that service; or to otherwise enable users to access content, information or other services offered over the internet;
(c) services that are incidental to the provision of the service described in (a) when furnished to users as part of that service, such as a home page, email and instant messaging (including voice and video capable email and instant messaging), video clips, and personal electronic storage capacity; and
(d) a home page, email, and instant messaging (including voice and video capable email mail and instant messaging), video clips, and personal electronic storage capacity, that are provided independently or not packaged with internet access.
Internet access does not include voice, audio or video programming, or other products and services (except services described in (a), (b), (c), or (d)) that utilize internet protocol or any successor protocol and for which there is a charge that is either separately stated or aggregated with the charge for services in (a), (b), (c), or (d).
Sections 40-21-80 and 40-21-100, Code of Ala. 1975, exempt internet access charges from the Utility Gross Receipts Tax and the Utility Service Use Tax.
Telecommunications services such as telephone services, cellular services, paging services, and fax services that are not used to provide access to the internet are subject to tax.
Section 40-21-82, Code of Ala. 1975, levies a privilege or license tax against every utility furnishing telegraph or telephone services in Alabama. The amount of the tax is determined by the application of rates against gross sales or gross receipts from the furnishing of such services in the state. Alabama code provides no exemption or exclusion for telephone services provided by the internet.
Section 40-21-82, Code of Ala. 1975, also allows providers of telephone services to combine or bundle taxable and nontaxable services on one invoice and charge the customer tax on the taxable charges.
Voice over Internet Protocol (VoIP) and any other form of telephony and similar services that utilize internet protocol are not included in the federal moratorium. These types of telephony and telecommunications services continue to be subject to the Alabama Utility Telecommunications Services Tax.
As of November 30, 2018, the federal government updated its credit card program. The General Services Administration (GSA) has entered into contracts with Citibank and US Bank under the program named GSA SmartPay® 3. (www.gsa.gov/gsasmartpay) The following information is provided to assist Alabama vendors in determining whether or not tax applies to transactions paid by GSA SmartPay® 3 cards.
The GSA SmartPay® 3 program provides four business lines (card types): Purchase, Travel, Fleet, and Integrated (includes fleet, travel and/or purchase functionality and offers a single card for all purchases.) These cards/accounts can be Centrally Billed Accounts (CBAs) or Individually Billed Accounts (IBAs).
Centrally Billed Accounts (CBAs) are charge card accounts in which all charges are billed directly to the federal government and paid directly by the federal government to the issuing bank. (Sales tax is not due on credit card purchases which are centrally billed to and paid by the federal government. Lodgings tax is not due on charges for lodgings which are centrally billed to and paid by the federal government.)
Individually Billed Accounts (IBAs) are charge card accounts in which charges are paid directly by the cardholder/federal employee to the issuing bank; the federal employee is then reimbursed by the government. (Sales tax and lodgings tax are due on credit card transactions where the purchases or charges for lodgings are billed to and paid by federal employees, who are then reimbursed by the federal government.)
Tax Advantage Travel Accounts (CBA/IBA) are charge card accounts in which charges for rental cars and lodging are paid directly by the federal government to the issuing bank and charges for travel-related purchases such as meals and incidentals are paid directly by the cardholder/federal employee to the issuing bank; the federal employee is then reimbursed by the government. (Sales tax and lodgings tax are due on credit card transactions where the purchases or charges are billed to and paid by federal employees, who are then reimbursed by the federal government.)
Department of the Interior: With the exception of the purchase of meals and incidental travel expenses which are individually billed and subject to sales tax, transactions paid for with the Department of the Interior’s integrated card are centrally billed and exempt from sales and lodgings tax. Purchases of fuel paid for by this card are not exempt from state fuel excise taxes.
The Department of the Interior GSA SmartPay® 3 charge cards can be identified by their unique prefixes and account numbers, government-designed artwork, and wording that indicates that the card is for official transactions for the U. S. Government. The Department of the Interior Integrated Card account numbers begin with 5568 26.
Prefix (1st four digits)
|4614 – Visa
4715 – Visa
4716 – Visa
5565 – MasterCard
5568 – MasterCard
|4614 – Visa
4615 – Visa
4716 – Visa
4486 – Visa
5565 – MasterCard
5568 – MasterCard
|4614 – Visa
4486 – Visa
5563 – MasterCard
5565 – MasterCard
5568 – MasterCard
5565 – WEX
6900 – WEX
7071 – WEX
7088 – Voyager
*Tax Advantage card purchases are centrally billed for lodgings and rental car expenses and individually billed for meals and incidentals.
Yes, see the list of informational brochures and pamphlets provided below:
The Bulk Upload method allows you to create a comma delimited text file for each tax type that contains your client’s return and payment information to upload to the system. These files can be created using a spreadsheet program (i.e., Excel) and saved as a comma delimited text file with either a .txt or .csv file extension. A separate file is required for each tax type using the following layouts. Note: If a header row is used during the creation of the file it should be removed prior to uploading since the system will begin importing with the first row of the file. Learn more about Bulk Filing
Before you can enter your client’s return information using the tax return form your client must first set their account to allow third party logons. Then you must add your client’s account to your Account List by logging on to MAT and clicking the “Add Access to Another Account” link on the left side of the Home screen. Then you will need to enter your client’s tax account number, E-file Sign on ID, E-file Access Code and the third party password that your client created when setting their MAT profile to allow third party logons. Once the account is added you can access it by clicking the account number link on the accounts list.
Bulk Filing is a method for third party tax preparers to submit multiple clients’ returns in a single file upload. To receive Third Party/Bulk Filing Status, you must submit the Third Party/Bulk Filing Application. Once approved, you will receive an “Agent” account that you can use to sign on to the MAT system. With an Agent account, and your client’s approval, you will be able to file returns and submit payments on your client’s behalf using a single login. There are two options for filing and paying returns using your MAT login. You can enter the information on the return form on each of your client’s accounts or you can create text files, by tax type, that contain your client’s return and payment information for uploading to the system.
Enter Your Banking Information on the payment page:
Note: If you have debit block on your bank account, please provide the following information to your bank so that your bank will allow the tax payment(s) to be processed without rejecting:
|ADORCCD000||(Company ID #) for Alabama Department of Revenue Payments|
|2621862182||for Company ID #’s for Self-Administered Jurisdiction Payments|
Payment Date: Payment Date is the date the payment will be sent to your bank. This date will default to the current date if payment is authorized prior to 4:00 p.m. CST, or the next day if payment is authorized after 4:00 p.m. CST. The Payment Date is editable if your payment is for a current return and is initiated before the Remit Due Date. In this case, you can choose to warehouse your payment up to the Remit Due Date.
If you wish for the payment to not be deducted from your bank account until the due date, you must edit the payment date field and enter that date. You can change this date to any date from the default Payment Date up to the remit due date. Unless you select a later date, the payment will be deducted from your bank account the next business day and paid directly to the government entity(s) listed under Pay To The Order Of.
Due Date: Due Date is the last date in which the payment is due before it is considered delinquent. PLEASE NOTE: To be considered timely paid an EFT payment must be transmitted by 4:00 p.m. CST on or before the Due Date so that the funds are immediately available to the State on the first banking day following the due date of payment.
Remit Due Date: Remit Due Date is the date in which you must submit the return for the EFT payment to be considered timely paid. NOTE: To be considered timely paid an EFT payment must be transmitted by 4:00 p.m. CST on or before the Due Date so that the funds are immediately available to the State on the first banking day following the due date of payment.
Early Filing and Payment, and Warehousing the Payment: If you make your payment prior to the Due Date, the payment will be deducted from your bank account the next business day. However, you can choose to warehouse your payment up to the Remit Due Date so that the payment is not deducted from your bank account until the date you specified.
If you wish for the payment to not be deducted from your bank account until the DUE DATE, you must edit the payment date field and enter that date. You can change this date to any date from the default Payment Date up to the remit due date. Unless you select a later date, the payment will be deducted from your bank account the next business day and paid directly to the government entity(s) listed under Pay To The Order Of.
Late Filing and Payment: If your return and payment are not timely filed and paid, you will be billed the appropriate interest and penalty. You cannot edit the Payment Date field for late payments. The payment will be deducted from your bank account the next business day from the Payment Date.
Pay To The Order Of:
Amount: The payment amount that will be deducted from your bank account.
Click the Continue button to verify the payment. Once verified, click the Authorize button to initiate the payment and receive your confirmation number.
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.
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. Learn More about Abatement Procedures
Abatements are authorized to be granted by the governing body of:
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.
Log into your My Alabama Taxes (MAT) account and send a request by clicking on the applicable tax account. Then click on the “Ask a question” link in the “I want to” section. You must provide a valid explanation of the reason you are requesting a waiver. Your account will be reviewed, and an agent will reply back to you.
Log into your My Alabama Taxes (MAT) account and send a request by clicking on the sales tax account. Then click on the “Ask a question” link in the “I want to” section. Remember to provide the effective date of the business closure. Please bear in mind, accounts will not be back dated beyond the current period due and all delinquent returns must be filed.
If you are merely changing the mailing address or a location address, log into your My Alabama Taxes (MAT) account and click on the blue “Address” hyperlink midway the page and follow the prompts. A web request will be sent to the Entity Registration (ERU). ERU will issue you an updated license in 2 to 3 days if applicable, otherwise, your account information will simply be updated. You will be able to review the updates in MAT in 2 to 3 days.
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 e-mail ADOR 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 HERE
If the legal ownership of the locations is the same, only one state sales tax number will be assigned. Sales should be combined and reported on one return.
The above is also true if the location is within a municipality and/or county that the state provides tax administration, only one local tax number will be assigned by the state. If the location is within a municipality and/or county that is not administered by the state, you will need to contact the locality or their tax administrator to register for a local tax account number. Access Local Government Contact Information
No. Religious organizations and institutions, including churches, church hospitals, etc., are not exempt from the payment of 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).
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.
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. Learn more about Business Licensing
Wholesale automotive dealers are required to have a sales tax number to obtain and maintain their Master Dealer License. Other wholesale businesses do not require a sales tax number; 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.
Taxpayers who will be selling beer, wine and tobacco products are required to purchase a one-time surety bond when registering for a new or the renewal of an Alabama sales tax license. The surety bond shall be in the amount of $25,000 and maintained for a two-year period.
The Sales Tax Surety Bond (S&U:BOND) and Instructions for Executing the Sales Tax Surety Bond (S&U:BOND Inst) may be found on the Department of Revenue website HERE
Taxpayers who will not be selling beer, wine and tobacco products are not required to obtain the surety bond.
You may apply for a tax account on myalabamataxes.alabama.gov. 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. Read the Entity Registration Instructions
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. Access Business Tax Reference Materials