State Tax Advisory: Renew ADOR-issued Sales and Use Tax Licensing Annually (From Now On)

On October 1, 2020, the Alabama Department of Revenue (ADOR) officially alerted Alabama taxpayers of a new annual renewal requirement for certain ADOR-issued sales and use tax licensing.

For the first time, Alabama taxpayers holding any of the following ADOR-issued licenses must renew that license between November 1, 2020 and December 31, 2020 — and annually thereafter.

  • Sales tax
  • Rental tax
  • Sellers use tax
  • Lodgings tax
  • Utility gross receipts tax
  • Simplified Sellers Use Tax (SSUT)

Current licenses in these categories will automatically expire as of December 31 each year. Without annual verification and renewal, such licenses won’t be valid beyond that date if the holder attempts to make a tax-exempt purchase for resale or for rental purposes. Note: consumer use tax licenses are not listed.

Beginning November 1, 2020, taxpayers can visit the My Alabama Taxes (MAT) website to verify and/or update business information, which is required to generate a new tax license for the upcoming year. The following information is required to be reviewed and/or updated:

  • Current Legal Name – reviewed
  • Owner/Officer/Member Information – reviewed and/or updated
  • Phone number(s) – reviewed and/or updated
  • Social security numbers/FEINs – reviewed
  • Location address(es) including d/b/a for each location – reviewed and/or updated
    • Main address must be reviewed
    • Location address(es) must be reviewed and/or updated

According to ADOR’s official notice, businesses reorganizing as a different entity type must apply for a new license. Otherwise, the annual license renewal serves as verification to ADOR that the same business entity for which the existing license was issued is still accurate. 

“If the license is not renewed pursuant to Section 40-23-6.1, Code of Alabama 1975, as amended, the State of Alabama Tax License previously issued to your business will be cancelled and you will no longer be allowed to use the Tax License in order to make tax-exempt purchases for resale or rental purposes. 

“Please be advised that your Alabama Tax License shall not be renewed until the required information has been provided to the Department.” 

This amendment to the State of Alabama tax code requires your immediate attention if you hold one of these licenses. If you have trouble filling out the application online, ADOR has provided a service phone number: (334) 242-1490.

If your business is reorganizing or plans to reorganize, you can also contact our tax planning team about proper entity selection, tax planning and consulting.  Contact our offices to discuss.