On October 28, 2020 the Alabama Department of Revenue (ALDOR) released guidance to taxpayers regarding new requirements for the renewal of sales tax and other tax licenses. These requirements change long-standing practices in Alabama that did not require the annual renewal of such licenses.

As of November 1, 2020 sales and certain other tax licenses must be renewed annually by December 31, 2020 through ALDOR’s online My Alabama Taxes (MAT) portal. While ALDOR will not be charging fees for the renewal of these licenses, the licenses must be renewed in order to be effective. The renewal obligation does not apply to all licenses issued by ALDOR but it will apply to the licenses for the following taxes:

• Sales Tax
• Rental Tax
• Sellers Use Tax
• Lodgings Tax
• Utility Gross Receipts Tax
• Simplified Sellers Use Tax

This new online renewal process through MAT allows taxpayers to print their licenses on-demand and quickly verify their licensing status. Businesses are able to update all of their required licenses through one renewal process. Notices of these renewal requirements have been sent to all affected taxpayers through MAT or mail, and reminders are going to be sent at the beginning of December.

To generate a new license for the upcoming year, taxpayers need to log into the MAT portal and update and/or verify all of the required information. Taxpayers must verify that the business will continue to operate in the same business entity type for which their existing license was issued. If the business entity type has changed, the taxpayer must apply for a new license.

In addition to this new obligation to renew a taxpayer’s own licenses, it will be important for any taxpayer that relies on, and has on file, a customer’s license for one of the listed taxes to obtain a new, current license from such customer. Otherwise, the customer’s license on file will not be effective to satisfy the taxpayer’s obligation to have a current license from its customers.

Please reach out to a member of Maynard’s Tax Practice if you have any questions or need assistance with this new tax license renewal process.