Taxpayers now need to renew Alabama tax licenses annually

Alabama taxpayers must renew certain Alabama tax licenses annually by January 1, 2021. This is a significant change in policy, as these tax licenses never required renewal in the past. Taxpayers can start renewing licenses for 2021 on November 1, 2020.

• The annual license renewal requirement applies to the following tax types:
• Lodging tax
• Rental tax
• Sales tax
• Sellers use tax
• Simplified sellers use tax
• Utility gross receipts tax

To renew a license, a business must confirm it still operates the same business entity type for which the current license was issued. If the business entity type has changed since the last license was issued — for example, from a Sole Proprietorship to a Corporation or LLC — the business will need to apply for a new license type and will receive a new license number.

Annual licenses will be good for one calendar year only, and failure to renew a license by the start of a calendar year will result in automatic cancellation of that license. Thus, taxpayers should allow ample time for the Alabama Department of Revenue to process a license renewal request. It typically takes three to five days to receive an account number.

To renew a license, taxpayers must review and update as needed the following information on the My Alabama Taxes website:

• Current legal name
• Owner/Officer/Member information
• Phone number(s)
• Social security number(s)/FEIN(s)
• Location address(es), including d/b/a, for each location
  • Main address 
  • Location address(es)

While sales tax permits and other tax licenses last the life of a business in many states, Alabama certainly isn’t the only state to require renewal of tax licenses. For example, sales tax licenses must be renewed every two years in Connecticut and every five years in Pennsylvania. Find more details in this state-by-state guide to sales tax permits.

Learn how Avalara can help businesses of all sizes register in all states.