Bradley attorney Bruce Ely was quoted in the Birmingham Business Journal on a new Alabama Department of Revenue (ADOR) rule that requires businesses to renew their licenses between Nov. 1 and Dec. 31 and every year thereafter to verify that the business is continuing to operate as the same entity type for which the existing license was issued. Alabama taxpayers holding either an ADOR-issued sales tax, rental tax, sellers use tax, lodgings tax, utility gross receipts tax, or Simplified Sellers Use Tax (SSUT) license must renew that license or they will no longer be valid as of January 1, 2021, if the holder attempts to make a tax-exempt purchase for resale or for rental purposes.
“We’re concerned that this important announcement largely went unnoticed by most busy CPAs, as well as businesses across the country that hold a sales tax, rental tax, seller’s use tax, or a handful of other ADOR-issued licenses,” said Ely. “Every one of those licenses automatically turns into a pumpkin at midnight on Dec. 31. Taxpayers need to get started on the renewal process on Monday, November 2.”
Previously, tax licenses were indefinite, Ely said. He said they were only cancelled if the license holder died or went defunct, or the holder was audited and the ADOR determined they were misusing the license to buy stuff tax free that wasn’t tax free.
The original article, "Major Alabama Tax License Change to Affect Hundreds of Businesses," appeared in the Birmingham Business Journal on October 21, 2020.