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Set Up Alabama Returns

This article applies to:Returns Central

Tell Us Where You Collect Tax

Add Alabama to the places where you collect tax. This tells AvaTax to calculate tax on Alabama transactions. See the Alabama Department of Revenue website for details about nexus, registration, and taxes in Alabama.

Alabama has local jurisdictions that collect tax separately from the state. Add local jurisdictions where you're registered when you add the state. 

Before you add Alabama, there are two things you need to do:

Alabama has both sales and sellers use tax. Pick the right tax type based on the way your business is registered and the tax return you need to file.

Alabama offers a Simplified Sellers Use Tax for qualified out-of-state retailers. If you're registered for Simplified Sellers Use Tax, make sure to select the simplified rate in Where you collect tax.

"Sourcing" determines the location where a sale is taxed. Alabama is a destination-sourced state.

Add Your Company Locations

Add any physical locations you have in Alabama. Alabama doesn't require state-level location reporting.

Some local Alabama jurisdictions require companies with multiple Alabama locations to register for separate IDs and file separate returns for each location. Make sure your local scheduled returns reference the correct location codes, if you're required to break out sales by location.

When you add a location:

  • Be sure to enter the state-assigned Location Code under Additional Information
  • After you validate the location address, make sure it falls in the jurisdictions you expect. If not, you may want to manage your jurisdiction overrides

Schedule Your Returns

After you tell us where you collect tax and add locations, you're ready to schedule returns. Go to Returns in AvaTax to provide a funding power of attorney and schedule your returns

Your company name and taxpayer ID from Your Company Details show up on your returns. Make sure they match what’s on your registration information.

Use this info to schedule your returns. Keep in mind that the selections you made when you told us where you collect tax, any location codes you entered, and the forms you select are related and should tie together.

All sales and use tax licenses issued by the Alabama Department of Revenue must be renewed annually. Refer to this article for more information.

Alabama is a home-rule state which means that state tax is remitted separately from local tax.

State Returns

Alabama has state returns for different tax types. Each state return requires a separate Alabama registration. The registration ID has a three-letter prefix based on the account type. Make sure you enter the registration ID associated with your account correctly when you set up your returns.

  • Select form AL 2100 if you're collecting sales tax and registered for the Alabama Sales Tax return
    • The registration ID format for sales tax registrations matches one of these two options: SLS-R1234564789 or SLS-0123 45678
  • Select form AL 2620 if you're collecting sellers use tax and registered for the Alabama Sellers Use Tax return
    • The registration ID format for sellers use tax registrations matches one of these two options: SLU-R1234564789 or SLS-01SU 45678
  • Select form AL 2610 if you're registered to remit consumers use tax on purchases
    • The registration ID format for consumers use tax registrations is: CNU-R012345678
  • Select form AL 2630 if you're registered for Alabama's Simplified Sellers Use Tax (8%)
    • The registration ID format for Simplified Sellers Use registrations is: SSU-R012345678
  • Rental Tax (AL 2410, RNT prefix) - Avalara Managed Returns doesn't support Rental Tax filing

Prepayments

  • If you're required to make a prepayment for Alabama, open a support case to have the AL 2105 set up. This return is used for prepayments instead of the AL 2100.
  • Avalara calculates prepayments for Alabama as 67% of the tax liability for the same month in the prior year. If Avalara doesn't have a full 12 months of prior year data, you're required to provide the total liability amount for the missing periods or we can't track prepayments for you for the first year.
  • Learn more about Alabama prepayments or contact the Alabama Department of Revenue at 334-242-1490 for more info

Local Returns

Because Alabama is a home rule state, local taxes are filed separately from the state taxes and in a variety of different ways. The way and where local taxes are filed in the state of Alabama constantly changes. To stay up to date, please use the search tool provided by the Alabama Department of Revenue. In the search tool, you can review the links for City and County Taxes Administered by the Alabama Department of Revenue and City and County Taxes Not Administered by the Alabama Department of Revenue to help you understand what forms a local is filed on. 

  • State-administered local jurisdictions are administered by the Alabama Department of Revenue.
    • Select form AL 9501 to file returns for state-administered local jurisdictions.
      • These jurisdictions are filed electronically on the Alabama MAT website through your Local Tax account, which has an “LCL-“ prefix.
      • This form is required if you would like to file returns for self-administered local jurisdictions (listed below).
      • Make sure to include your Local Tax account number and MAT website login credentials when you schedule this return.
      • When filing this form, if there is no state-administered local sales to report, the locality of Homewood will be defaulted on the form for filing.
      • Note: If this form is not set up in AvaTax, the calculated liability is listed as ALABAMA CITY & COUNTY on the Manage and Approve Returns page. 
  • Self-administered local jurisdictions administer their own tax and filings.
    • Avalara files these jurisdictions electronically on the Alabama MAT website.
    • You may not be required to file returns for all self-administered local jurisdictions, and everyone's reporting requirements are different.
      • These jurisdictions are reported on the AL 9501 return, but you must set up a separate return for each self-administered jurisdiction to let Avalara to know which jurisdictions to include on the return. An example of a self-administered return form is AL Calera.
      • Each self-administered jurisdiction requires a separate registration ID, and may also have a different filing frequency from your 9501 return.
    • Note: If any self-administered local form is not set up in AvaTax, the calculated liability is listed as the jurisdiction's name on the Manage and Approve Returns page.
  • Privately-administered local jurisdictions are administered by a private collecting firm (Avenu Insights & Analytics and STACS). 
    • Select USALALATAXUNIVERSAL (Avenu Universal Return) to file taxes for local jurisdictions administered by Avenu Insights & Analytics.
      • Avalara files Avenu-administered jurisdictions on SalesTaxOnline.com.
      • You can create a login and register for an account number through this website.
      • Make sure to include your SalesTaxOnline login credentials and Avenu account number when you schedule this return.
      • If you have any jurisdictions that must be filed on a specific basis (monthly, quarterly, annually): please submit a support case with filing instructions.
      • If no sales are present for an Avenu-administered jurisdiction for a given period: Avalara will not report it unless otherwise instructed.
      • Note: If this form is not set up in AvaTax, the calculated liability is listed as ALATAX LOCAL GOVERNMENT SERVICES on the Manage and Approve Returns page. 
    • Avalara files tax for STACS-administered jurisdictions on the AL 9501 return, which is also used to report tax for state-administered jurisdictions.
  • Some local jurisdictions (such as Mobile City, Orangebeach City, and Huntsville) require returns to be electronically filed.
    • It is important to make sure your return details such as e-file credentials and filing frequencies stay up to date in AvaTax. 
    • If we are unable to electronically file your returns, we will mail a paper return which may generate a notice for penalties and interest.
  • If you have further questions, please contact Alabama Department of Revenue or any of the non-state administered Alabama local jurisdictions.

 

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