Alabama Governor Kay Ivey has taken a bold step to help the state's small businesses with the announcement of a groundbreaking tax reform initiative. Effective October 1, 2023, more than 3,000 small businesses in Alabama will breathe a sigh of relief as they will no longer be burdened with the requirement to pay monthly estimated sales taxes to the state Department of Revenue.
Governor Ivey emphasized:
Alabama’s economy thrives on the backbone of our hard-working small businesses. In my 2023 State of the State Address, I called upon the Legislature to ease the financial strain on these enterprises, enabling them to flourish in the face of a challenging national economy."
Responding to the governor's call, the Legislature swiftly passed legislation, which Governor Ivey inked into law on June 9, 2023. This new law effectively removes the monthly estimated sales tax obligation for businesses with less than $20,000 in average monthly sales tax liability.
Governor Ivey expressed her satisfaction, stating:
I'm delighted to announce that this reform, set to take effect on October 1, is projected to positively impact over 3,000 small businesses in Alabama. By liberating businesses with less than $500,000 in monthly sales from the requirement to prepay estimated monthly sales taxes and allowing them to pay these taxes post-sale, we are providing them with improved cash flow and the flexibility they need to operate effectively."
Starting October 1, 2023, affected small businesses will be mandated to pay their sales taxes based on the preceding month's sales tax receipts, payable in monthly installments, due on or before the 20th of each month.
To ensure a smooth transition, the Alabama Department of Revenue will scrutinize businesses' monthly sales tax returns for the calendar year 2022 to identify those impacted by the new law. Those affected by this change in threshold will be promptly notified via letter.
For businesses seeking more information, the Alabama Department of Revenue’s Sales Tax Administration Section is at your service.
Governor Ivey's decision to implement this tax reform demonstrates her commitment to fostering a conducive environment for small businesses in Alabama. With greater cash flow and flexibility on the horizon, these enterprises are poised to thrive and drive Alabama's economy forward.
Please share this story on social media if you enjoyed reading it!
As always, thank you for reading! Your support means a lot. You can follow my work on X (formerly Twitter) @PressRealz, and my newsletter. Got a story you want me to track down? Let me know in an email to newsbreakcontributor@gmail.com
Comments / 0