A major tax reform is on its way beginning Sunday.
Gov. Kay Ivey announced more than 3,000 Alabama small businesses will no longer be required to pay monthly estimated sales taxes to the state Department of Revenue.
“By freeing small businesses with less than $500,000 in monthly sales from having to pay estimated monthly sales taxes and allowing them to pay the taxes after the point of sale, they will experience greater cash flow and accordingly more flexibility to operate,” Ivey said.
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According to the Alabama Department of Revenue, businesses’ monthly sales tax returns for calendar year 2022 will be reviewed to identify those that are affected by the new law. Those who are affected by the change in threshold will be notified by letter.
As of Sunday, affected small businesses will be required to pay sales taxes based on the previous month’s sales tax receipts, payable in monthly installments on or before the 20th of the month.
“Alabama’s economy is anchored in the stability and prosperity of many thousands of hard-working small businesses,” Ivey said.
“In my 2023 State of the State Address, I called on the Legislature to help lower the financial load shouldered by most small businesses, making it easier for them to thrive in a challenging national economy.”
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Ivey’s office says businesses can contact the Alabama Department of Revenue’s Sales Tax Administration Section for more information.
Grayson Everett is the state and political editor for Yellowhammer News. You can follow him on Twitter @Grayson270
