Alabama: 3rd-Party Setup & Understanding Alabama Tax Account Types

Finding the Required Onboarding Information

PLEASE NOTE: The third-party access setup must be completed by a user who has permission to manage other users on your business’s MAT account.

Third-Party Access Settings and Password

• Log in to MAT

• Confirm Third-Party Access is enabled:

  • Click the Manage My Profile link

  • Click the Other Actions tab

  • Click the Manage third-party access to my accounts link in the Access Management Section

  • Change the settings to the following:

    • Allowed: Yes

    • Default Account Access: File & Pay

  • Third Party Password

    • If no password exists: Create a new third-party password and enter it in the Taxually onboarding process

    • If a password already exists: Enter the existing password in the Taxually onboarding process

  • Can’t find these settings? You likely don't have "Full Access" privileges if you cannot locate or manage these settings. To verify and find the correct user:

    • Option 1: 

      • From the MAT home page, click the Other Actions menu tab

      • Click View Access

      • Look for the user listed with "FullAccess" - this person needs to complete the setup

    • Option 2: 

      • Click Manage My Profile

      • Click Other Actions tab

      • Click Manage my access to tax accounts and/or  Manage third-party access to my accounts

      • Find the person with "Full Access" listed as the "General Access"

Sign-On ID and Access Code

These credentials were provided when your MAT account was originally created. If you don't have this information:

• In your MAT account, from the home page, click Manage My Profile 
• Click the Other Actions tab
• Click the View MAT messages under the MAT Messages Section
• Click the Send a MAT message to ALDOR link (above the received/sent menu bar) and follow the prompts
• Example Message: "I would like to assist a third-party agent in gaining access to our sales and use tax account, but we misplaced our Sign-On ID and Access Code that was assigned when we created our account. Could you please provide [Business Name]’s Sign-On ID and Access Code? Thank you."

Registered Tax Account Information

• From the Accounts tab in MAT, review your listed accounts

• Select your registered account types in Taxually from these options:

  • Sales Tax

  • Sellers Use Tax

  • Local Tax

  • Simplified Sellers Use Tax 

• Note: Remote sellers, without a physical presence in Alabama, should be registered for a Simplified Sellers Use Tax account. If you think this may be applicable to you, please read the second section of this guide below: “Should You Switch to a Simplified Sellers Use Tax Account?” for more information.

• Determine Filing Frequency

  • Click File or View returns and periods

  • Review the return periods listed to determine how often you file your returns

• For Effective Registration Date (Required for First Return Filings only):

  • Your effective registration date is found on your official Tax License letter from the Alabama Department of Revenue. To locate the electronic copy:

    • Click the Tasks menu tab

    • Click View Letters (if available)

    • Find and open the Sales Tax Certificate (Original) letter

    • Note the Effective Date

Physical Presense in Alabama?

• Do you have a physical presence in Alabama?

  • This includes:

    • Inventory stored in Alabama

    • Offices or facilities

    • Employees

    • Any other significant recurring contact with Alabama

• If you do not have a physical presence, we recommend switching to the Simplified Sellers Use Tax account to avoid complex local tax registration requirements. Please see the section below for additional information on this

Should You Switch to a Simplified Sellers Use Tax Account?

Understanding Alabama Tax Account Types

Sales Tax Account

• Purpose: For businesses with physical locations in Alabama, selling tangible personal property

• Best for: Retailers with inventory in Alabama or storefronts, warehouses, or offices

• Requirement: Must also register for Local Tax account to collect local taxes

Sellers Use Tax Account

• Purpose: For out-of-state businesses with physical nexus in Alabama

• Physical nexus includes: Sales offices, agents, inventory, employees, or significant recurring contact

• Requirement: Must also register for Local Tax account to collect local taxes

Local Tax Account

• Purpose: Collects varying local sales taxes for 200+ Alabama jurisdictions

• Challenge: Alabama doesn't administer all local taxes, requiring separate registrations with individual localities

• Trigger: Collecting local taxes may require registration with each non-state-administered locality

Simplified Sellers Use Tax Account ⭐ Recommended for Remote Sellers

• Purpose: Streamlined option for businesses without an Alabama physical presence

• Rate: Flat 8% tax on all Alabama sales

• Benefits:

  • Only one tax return to file (vs. separate state and local returns)

  • No individual local registrations required

  • Simplified compliance

  • Reduced administrative burden

Important Considerations for Local Tax Accounts

Warning for Businesses Collecting Local Taxes:

If you currently have a Local Tax Account and collect taxes in non-state-administered localities, you may be required to register separately with each locality once sales are reported. This creates:

• Multiple registration requirements

• Additional compliance obligations

• Increased administrative complexity

• Potential penalties for non-compliance

For remote sellers without physical presence in Alabama: We strongly recommend switching to the Simplified Sellers Use Tax account to avoid these complications.

Making the Switch

If you determine that Simplified Sellers Use Tax is right for your business, we can request this change for you during onboarding unless you specifically indicate otherwise. This switch will:

1. Simplify your tax compliance

2. Reduce filing requirements from multiple returns to one

3. Eliminate local registration triggers

4. Apply a consistent 8% rate to all Alabama sales

Need help?

We are here to support you! Please contact us