The Alabama Department of Revenue recently reminded taxpayers that beginning Nov. 1, 2020, annual renewals of the State of Alabama Tax License are now required. The following tax types will be required to be renewed annually:
- Sales Tax
- Rental Tax
- Sellers Use Tax
- Lodgings Tax
- Utility Gross Receipts Tax
- Simplified Sellers Use Tax
Alabama taxpayers will be able to verify and update their business information for new licenses on the My Alabama Taxes website for the upcoming year. In order to renew a license, the following information must be reviewed and/or updated as necessary: legal name, owner and officer information, contact information, business locations and social security numbers or FEINs. Businesses that change entity type will need to apply for a new license.
Alabama taxpayers will have two months beginning Nov. 1, 2020 to renew their respective licenses for 2021 and must continue to renew those licenses annually going forward. Taxpayers should understand that current licenses not renewed by the end of the year will expire. In addition to other consequences, taxpayers with expired licenses will be unable to make tax-exempt transactions, such as purchasing for resale.
A few other states also use a one to five year renewal period for various tax licenses. While not precedential, this is a significant change for Alabama taxpayers holding one of the annual licenses. Taxpayers will need to ensure that a process is in place to renew the licenses on an annual basis. A notice from the department is available here with more information. Alabama taxpayers should reach out to their state and local tax advisers with questions on the new compliance requirements.