What do I need to get an Alabama business license?
- Name and form your company. ...
- Apply for your Alabama business license. ...
- Determine which other local licenses may be applicable. ...
- Apply for any additional statewide license(s) you need. ...
- Apply for federal licenses and tax treatment (as necessary)
An Alabama business license can cost anywhere from $15 to several hundred dollars, depending on several factors. If your business is based in Alabama, refer to the Alabama Department of Revenue for business license information specific to your business.
Does Alabama Require a Business License? Yes. Every Alabama LLC must obtain a Business Privilege License from the county where the LLC is located. And your LLC might need other licenses or permits, but that depends on where your business is located, and what it does.
Sole proprietors in Alabama aren't required to have a general business license from the state. However, they are required to have a privilege license issued by the probate judge in the county where the business is located.
Turnaround Time: In general, turnaround time for incorporating a business in Alabama is 6-8 weeks. Expedited filings, which require an additional fee, typically take 4-5 weeks.
- Choose a Business Name. You must form your business with a formal business name, so start by choosing a name for your business. ...
- Register Your Business. ...
- Get Your Business EIN. ...
- Apply for Required Permits or Licenses. ...
- Open a Business Bank Account. ...
- Get Business Insurance. ...
- Market Your Business. ...
- Bottom Line.
You can get Alabama business licenses in person and online by applying with the correct licensing or regulatory agency for your business. Business licensing requirements generally depend on your business's activity and location (zoning requirements). There are three main licensing jurisdictions: State.
You can apply for a federal employer identification number on the IRS website. Keep in mind that you will also have to get a state tax ID number from the Alabama Department of Revenue. EINs are provided by the IRS free of charge. If you apply online, you can get your company's EIN in about five minutes.
Alabama Resale Certificate FAQs
There is no cost for a resale certificate or sales tax license in Alabama.
The State of Alabama requires persons, firms, or corporations that engage in or transact any trade, business, commerce, occupation, vocation, or profession for gain or profit to pay a license fee. You may also need a license from the city that you will be operating the business in.
How much does it cost to register a business name in Alabama?
Obtaining a Trade Name or DBA
If you want to establish an Alabama DBA (trade name), you must file a form with the Secretary of State. You'll need to pay a filing fee of $30.
Sole Proprietorships offer no personal asset protection. If your business is sued, you're personally liable for the business debts and obligations. On the other hand, if you form an LLC, your personal assets are protected if your business is sued.
It costs $200 to form an LLC in Alabama. This is a fee paid for the Certificate of Formation. You'll file this form with the Alabama Secretary of State. And once approved, your LLC will go into existence.
You must register your business with the Alabama Secretary of State's office by filing either a Certificate of Formation (for LLCs) or a Certificate of Incorporation (for corporations). You also need to apply for certain county or municipal business licenses.
Alabama LLC Approval Times
Mail filings: In total, mail filing approvals for Alabama LLCs take about 1 week. This accounts for the 1-2 business day processing time, plus the time your documents are in the mail. Online filings: Online filings for Alabama LLCs are approved immediately.
Business Privilege Tax Rate
The tax rate for business privilege tax is graduated based on the entity's federal taxable income apportioned to Alabama. The rates range from $0.25 to $1.75 for each $1,000 of net worth in Alabama. The minimum business privilege tax is $100.
- Name your Alabama LLC.
- Additional considerations:
- Choose your registered agent.
- Prepare and file a certification of formation.
- Receive a certificate from the state.
- Create an operating agreement.
- Get an Employer Identification Number.
- Keep certain LLC records on-site.
How much does it cost to get an EIN? Applying for an EIN for your Alabama LLC is completely free. The IRS doesn't charge any service fees for the EIN online application.
An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. It is also used by estates and trusts which have income which is required to be reported on Form 1041, U.S. Income Tax Return for Estates and Trusts.
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4PDF contains all of the required information.
What are the benefits of a seller's permit?
A seller's permit is a state license that allows you to sell items at the wholesale or retail level and to issue resale certificates to suppliers. Issuing a resale certificate allows you to buy items you will sell in your business operations without paying amounts for tax to your suppliers.
How to File and Pay Sales Tax in Alabama. The Alabama Department of Revenue requires that online sellers file sales tax online. You can file My Alabama Taxes. If you are remitting more than $750 in one payment, Alabama requires you to pay via electronic funds transfer (EFT) through My Alabama Taxes ONE SPOT.
Businesses must use My Alabama Taxes (MAT) to apply online for a tax account number for the following tax types. Once you register online, it takes 3-5 days to receive an account number. You can read full instructions on how to register select tax types through My Alabama Taxes Help.
Businesses must use My Alabama Taxes (MAT) to apply online for a tax account number for the following tax types. Once you register online, it takes 3-5 days to receive an account number. You can read full instructions on how to register select tax types through My Alabama Taxes Help.
Applying for an EIN for your Alabama LLC is completely free. The IRS doesn't charge any service fees for the EIN online application.
Alabama has a 4.00 percent state sales tax rate, a max local sales tax rate of 7.50 percent, and an average combined state and local sales tax rate of 9.25 percent. Alabama's tax system ranks 41st overall on our 2023 State Business Tax Climate Index.