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Alabama sales tax notices

Got a letter from the Alabama Department of Revenue (ALDOR)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Alabama Department of Revenue (ALDOR) (opens in a new tab)

Disagree with a notice?

To challenge a preliminary assessment, file a written petition for review with ALDOR, using the petition form included with the assessment or a signed statement of your objections. ALDOR may adjust the assessment or schedule a conference. If you do not petition, or the assessment is upheld, ALDOR enters a final assessment. A final assessment can be appealed to the Alabama Tax Tribunal or circuit court, whether or not you filed a petition for review.

Deadline: Preliminary assessment: 30 calendar days from the date of issuance. Final assessment: 60 days from the date of mailing or personal service to appeal to the Alabama Tax Tribunal or circuit court

Source: Alabama Department of Revenue (ALDOR) (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Preliminary Assessment

A notice proposing additional tax, penalty, and interest. It is issued after an audit or when a return is filed without payment, and it includes a petition for review form.

Why you got it

  • An audit found additional tax due
  • A sales tax return was filed without full payment

What to do

  1. Check the periods and amounts against your returns and records
  2. If you disagree, file a written petition for review with supporting documents within 30 calendar days. You can ask for a conference in the petition
  3. If you agree with the tax, pay the tax and interest to the address on the assessment
  4. If you had reasonable cause for the penalties, ask for a waiver now (Form PWR or Form 911AL). ALDOR only considers penalty waivers before an assessment is final

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 30 calendar days from the date of issuance

Source: Preliminary Assessment Appeal Rights - Alabama Department of Revenue (opens in a new tab)

Assessment

Final Assessment

Entered when no petition for review is filed on a preliminary assessment, or when ALDOR upholds it after review. Once the appeal period ends, the file goes to the Collection Services Division, and the debt has the force of a court judgment.

Why you got it

  • No timely petition for review of a preliminary assessment
  • ALDOR upheld the preliminary assessment in whole or in part

What to do

  1. Check the assessment against your records and any petition you filed
  2. If you disagree, file a written notice of appeal with the Alabama Tax Tribunal (7515 Halcyon Summit Drive, Suite 103, Montgomery, AL 36117) or appeal to circuit court
  3. If you agree, pay the assessment to avoid collection action
  4. If penalties are the issue, give your reasonable cause reasons in your appeal, or ask ALDOR's Office of Taxpayer Advocacy (Form 911AL) for help. Collection Services cannot waive penalties

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Appeal within 60 days from the mailing or personal-service date, whichever is earlier (per ALDOR FAQ)

Source: When do the appeal rights for a final assessment expire? - Alabama Department of Revenue (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Audit notice (written records request)

If a return is selected for audit, an auditor gives reasonable notice, schedules an appointment (at your business, a service center, or electronically), and tells you in writing which records are needed.

Why you got it

  • Your return was selected for audit

What to do

  1. Gather the records listed in the auditor's written notice before the meeting
  2. To have someone represent you, file Form 2848A (Power of Attorney and Declaration of Representative)
  3. If the auditor proposes penalties and you had reasonable cause, attach a written waiver request to the audit when it is presented for assessment or paid
  4. Review any preliminary assessment issued after the audit, and file a petition for review within 30 days if you disagree

Source: Audit Process - Corporate - Alabama Department of Revenue (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Final Notice Before Seizure

The first letter from ALDOR's Collection Services Division. It warns that further collection action will follow if the final assessment is not paid in full.

Why you got it

  • A final assessment's appeal period expired without payment

What to do

  1. Pay in full within ten days by check, money order, or credit/debit card
  2. If you cannot pay in full, contact Collection Services (334-242-1220) about your options
  3. Note that Collection Services cannot waive penalties or interest at this stage

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Ten days

Source: Collection Processes - Alabama Department of Revenue (opens in a new tab)

Collections

State tax lien

ALDOR files liens against taxpayers whose files are transferred to Collection Services. The lien is recorded with the Judge of Probate where you live or own property and can affect your credit.

Why you got it

  • An unpaid final assessment transferred to Collection Services

What to do

  1. Pay the liability in full. The lien is released once the debt is paid
  2. If you cannot pay in full, contact Collection Services about your options
  3. See ALDOR's 'Plain Talk II: Collection of Your Tax Liability' for details on the collection process

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Liens - Alabama Department of Revenue (opens in a new tab)

Collections

Garnishment (wage, financial institution, or third party)

ALDOR can garnish 25% of gross wages, the full balance of bank or brokerage accounts (up to the amount owed), or other property held by third parties, such as rental income, to collect a final assessment.

Why you got it

  • An unpaid final assessment in Collection Services

What to do

  1. Pay the liability in full to end the garnishment
  2. Employers and banks that receive a garnishment letter respond through My Alabama Taxes (Other Actions tab, 'Respond to a garnishment letter')

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Garnishments - Alabama Department of Revenue (opens in a new tab)

Ask for penalty relief

Penalties on a Alabama notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Request for Waiver of Penalty

Form PWR (Request for Waiver of Penalty); ALDOR also accepts Form 911AL with the Penalty Waiver box checked
  1. Pay the tax and interest first. ALDOR will not consider a penalty waiver until they are paid
  2. For a late return, send the request through My Alabama Taxes: open the tax account and use "Ask a question" to explain why you were late
  3. Or complete Form PWR explaining the facts, attach supporting documents and a copy of your billing notice, and mail it to the address on the billing notice
  4. Ask before the assessment becomes final. Collection Services cannot waive penalties or interest

What qualifies: Reasonable cause, including acting in good faith. Examples ALDOR lists: death, major illness or unavoidable absence; casualty or natural disaster; inability to obtain records; a nonrecurring honest mistake; reliance on a competent tax advisor; or reliance on erroneous ALDOR advice

Interest: Form PWR says tax and interest must be paid before a penalty waiver will be considered. Plain Talk II says Collection Services cannot waive penalties or interest

Source: Form PWR, Request for Waiver of Penalty - Alabama Department of Revenue (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Alabama sales tax guide.

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