ADOR Issues Important Notice that Affects Thousands of Businesses

SALT Alert: Alabama Edition

Client Alert

Author(s) ,

The Alabama Department of Revenue (ADOR) posted a notice on their website on October 1 that escaped the attention of most media outlets and probably many businesses and their CPAs around the state of Alabama. For the first time, 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 between November 1 and December 31 of this year — and every year thereafter. Thus, current licenses in these categories will automatically expire as of December 31, 2020, and, most importantly, won’t be valid beyond that date if the holder attempts to make a tax-exempt purchase for resale or for rental purposes. Note that consumer use tax licenses are not listed.

The ADOR also reminded taxpayers that if they reorganize as a different type of business entity, they must apply for a new tax license. For example: if a retailer elects to change its federal/state tax classification from a single member LLC or multi-member LLC classified as a sole proprietorship or partnership, respectively, to an “S” or “C” corporation.

Thankfully, the renewal process can be accomplished on-line through the ADOR’s “My Alabama Taxes”(MAT) website. We urge our readers to mark Monday, November 2, on their calendars, to begin this process. A link to the notice is here. The ADOR offered this contact number should an applicant have any questions or trouble in completing the application on-line: (334) 242-1490.

Please join us on Friday morning, October 30, 2020, for a 3.5 (4 PD credit) hour State & Local Tax Update  sponsored by the Alabama Society of CPAs. Webinar details and registration can be found here.