Gov. Kay Ivey today implemented a major tax reform initiative to help Alabama small businesses. Beginning Oct. 1, more than 3,000 Alabama small businesses will no longer be required to pay monthly estimated sales taxes to the state Department of Revenue. Governor Ivey signed the changes into law in June.

The new law removes the monthly estimated sales tax requirement for businesses with less than $20,000 in average monthly sales tax liability. 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.

According to the Alabama Department of Revenue, businesses’ monthly sales tax returns for the 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.

NFIB State Director Rosemary Elebash told WBMA-ABC 33/40 in Birmingham that the change would be a big help to small businesses dealing with inflation and Alabama’s labor shortage. “This is a tremendous savings, not in doing estimated sales tax, but also saves the paperwork that small business owners have to provide every month,” she said.