Alabama: Sales Tax Handbook
How to file your sales taxes in Alabama
Once your business has an Alabama sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the Alabama government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
How To Collect Sales Tax In Alabama
If the seller has an in-state location in the state of Alabama, they are legally required to collect sales tax at the tax rate of the area where the buyer is located, as Alabama is a destination based sales tax state.
If the seller's location is out of state, then the collection of sales tax is still done in the same way. The seller would still be required to charge the rate of sales tax from the buyer's location.
Sales Tax Collection Discounts In Alabama
Alabama allows merchants to keep a small percentage of the sales tax they collect as a collection discount, which serves as compensation for the work required to comply with the Alabama sales tax regulations
The collection discount is 5% of the first hundred dollars of the due tax, and 2% of any amounts that are over one hundred dollars, which can be a maximum of four hundred dollars. This is the only collection discount in the state.
Your Alabama Sales Tax Filing Requirements
To file sales tax in Alabama, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
In the state of Alabama, all taxpayers have have the option of paying either online, using the My Alabama Taxes ONE SPOT document to file, or taxes can be filed manual through the mail.
Tax payers in Alabama should be aware of late penalties the state applies. The penalty for late filing is either 10% of the tax which is due, or fifty dollars, whichever is the greater amount. The penalty for late payment is 10% of the tax due.
The state of Alabama requires that a seller who owns a sales tax permit files sales tax return on the required day, even if the tax return would have been "zeroed-out", and there is nothing to report.
Your Alabama Sales Tax Filing Frequency & Due Dates
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of Alabama sales tax filing due dates.
Where To File Your Alabama Sales Tax Return:
Filing Your Alabama Sales Tax Returns Online
Alabama supports electronic filing of sales tax returns, which is often much faster than filing via mail.Electronic filing is required for all taxpayers.
Alabama allows businesses to make sales tax payments electronically via the internet.Electronic payments are required to be made by taxpayers who will be making individual payments of at least seven hundred and fifty dollars.
You can process your required sales tax filings and payments online using the official My Alabama Taxes (MAT) website, which can be found here . You should have received credentials to access your My Alabama Taxes (MAT) account when you applied for your Alabama sales tax license.
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