Learn more from the Alabama Department of Revenue’s Sales, Use and Business Tax Division Visit the Sales, Use, and Business Tax FAQ page for information on e-commerce and mail order sales tax rulings, as well as information regarding who collects and enforces the 37 different taxes in the state. Find Sales and Use Tax Forms here Alabama Revenue Department Sales, Use and Business Tax Division P.O. Box 327550 Montgomery, AL 36132 334-353-7827
Property TaxThe Alabama Department of Revenue, Property Tax Division administers property tax within the state. Learn more here. Find information on Ad Valorem Property Tax here. Learn more about tax rates for classes of property, property tax exemptions, and county mileage rates.
Business Privilege TaxThis tax is owed by all corporations, limited liability entities, and disregarded entities which either are doing business in the State of Alabama, or are registered with the Alabama Secretary of State’s Office to do business in Alabama. The Alabama business privilege tax return and payment is due two and one-half months after the end of the taxable year for corporations. The return and payment is due three and one-half months after the end of the taxable year for non-corporate taxpayers, such as limited liability companies.Learn more here. Business entities are liable for the Alabama business privilege tax for each taxable year during which the entity is in legal existence, regardless of the level of business activity. The Alabama business privilege tax is based on the net worth of the business entity and is levied on business entities by §40-14A-22, Code of Alabama 1975. Generally, the minimum business privilege tax is $100.
Corporate Shares TaxFind information on the assessment of shares of a domestic corporation here. Find Corporate Shares Tax Forms here Please contact the Alabama Department of Revenue, Individual and Corporate Tax Division at 334-242-9800 for more information or forward your correspondence to: Alabama Department of Revenue Individual and Corporate Tax Division Business Privilege Tax Section PO Box 327431 Montgomery, AL 36132-7431
Income TaxThis tax is on the entire net income of every individual and corporation domiciled in Alabama, and of every non-resident deriving income from within Alabama. Income tax is required to be paid throughout the year either by withholding or estimated tax. Withholding of Alabama income tax is required by all employers. Whenever a new employee begins a new job, he or she is required to complete a form A-4, Exemption Certificate, and file it with the employer. The employer withholds Alabama Income Taxes on the basis of the information furnished by the employee on this exemption certificate. If an employer fails to secure a completed A-4 form from his employee, the employer must withhold Alabama Income Taxes on the basis of no exemptions. A Federal form W-4 will not be recognized in lieu of a form A-4. Every employer is required to secure completed exemption certificates from his employees, even though he may not be required to withhold any Alabama income tax. Tax withheld is based on withholding tables or the formula provided in the “State of Alabama Withholding Tax Tables and Instructions for Employers” publication. Assignment of an Alabama withholding tax number is required before an employer may submit Alabama Income Tax to the Department of Revenue. Employers file an application for this withholding tax number. The taxpayer must use this code number to identify all payments of Alabama withholding tax and include the number on all correspondence concerning the business’s income tax withholding accounts. A declaration of individual estimated income tax is required of an individual who is subject to income tax if the individual anticipates having income from sources other than wages. In the case of a single or married person filing separately having non-wage income of $1,500 or more and in the case of a married person living with spouse and filing a joint return having non-wage income of $3,000 or more, a declaration of estimated income tax is required. Domestic corporations (corporations created or organized under the laws of the state of Alabama) must pay a corporate income tax imposed on net income at the rate of 5%. Foreign corporations (corporations created or organized outside the state of Alabama) pay this tax at a rate of 5% also, and it is applicable to the net income from property situated within Alabama and/or from business done and transacted in Alabama. Note: There are special rules with respect to the apportionment of income in the case of foreign corporations having income from both within and outside the state of Alabama. Please contact the Alabama Department of Revenue, Individual and Corporate Tax Division at 334-242-9800 for more information.
Employment TaxEmployment-related taxes can generally fit into three categories: those taxes you must pay for each employee, taxes you must withhold from each employee’s pay and workman’s compensation insurance. Listed below are those taxes which are withheld from your employees’ gross wage or other expenses paid by the employer only.
Payroll Withholding Tax
Federal Income Tax WithholdingFor more information concerning federal withholdings, read Publication 15 (Circular E): Employer’s Tax Guide Internal Revenue Service Tax Information Toll Free: 1-800-829-1040 www.irs.gov
Social Security Tax (FICA)Department of Health and Human Services Social Security Administration 1-800-772-1213 www.ssa.gov Order forms from the Department of Health and Human Services online or by phone.
State Withholding TaxRead Withholding Tax Tables and Instructions for Employers and Withholding Agents to learn about tax tables and general instructions for computing, withholding, and remitting Alabama withholding tax. Be aware that depending on your business’ physical location, certain local withholding taxes may apply. You may wish to contact your local city government offices concerning such taxes. Alabama Revenue Department Withholding Tax Section P.O. Box 327480 Montgomery, AL 36132-7480 334-242-1300 State unemployment tax and local occupational taxes are not administered by the Department of Revenue. Contact Alabama Department of Labor for more information concerning unemployment tax at 334-242-8830. To obtain information concerning local occupational tax, you must contact the city or county which is administering the tax.
Other Taxes and/or Expenses Paid by the Employer
Federal Unemployment TaxFor more information concerning Federal Unemployment Tax (FUTA), read Publication 15 (Circular E): Employer’s Tax Guide Internal Revenue Service Tax Information 1-800-829-1040 www.irs.gov
State Unemployment TaxAlabama Department of Labor Unemployment Compensation Tax Division 649 Monroe Street Montgomery, AL 36131 334-242-8830 labor.alabama.gov
Workmen’s Compensation InsuranceAlabama Department of Labor Workmen’s Compensation Division 649 Monroe Street Montgomery, AL 36131 334-242-2868 or 1-800-528-5166 labor.alabama.gov