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Contact Info:
City of Huntsville, AL
P.O. Box 308
Huntsville, AL 35804
Phone: 256.535.CITY (2489)
Web: hsvcity.com
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| Finance Department - Tax Information |
Last update: February 20, 2008
The City of Huntsville administers seven local taxes. Businesses and individuals who have transactions in Huntsville are responsible for reporting certain information and paying applicable taxes directly to the city. Information about these taxes is available on this web site.
Information on this site is only intended for general guidance on tax matters. You are strongly encouraged to consult with your advisors or ask city representatives about the specific effect of city taxes on your activities.
Finance Department Tax Contacts
| By Phone |
(256) 427-5070 or (256) 427-5068 |
| By Fax |
(256) 427-5064 |
| By Email |
FinanceTax@hsvcity.com |
| By Mail |
City of Huntsville Finance Department
P.O. Box 308, Huntsville, AL 35804-0308 |
| In Person |
City of Huntsville Finance Department
308 Fountain Circle, 4th floor, Huntsville, AL 35801 |
Important Tax Notices
January 2008 – (Contractors)
June 28, 2007 - (SALES TAX HOLIDAY 2007)
June 23, 2006 - (SALES TAX HOLIDAY and Other Matters)
September 15, 2006 - (Automotive vehicle dealers)
Advice from City Representatives
Only tax representatives of the Finance Department are authorized to provide advice on city tax matters. Only written advice from the city is considered authoritative, so please contact the Finance Department if you require this.
Tax Rates
| Tax Type |
Rate |
Sales and Use Tax
General
Automotive |
3.50%
1.75% |
Rental and Leasing License Fee
General
Automotive |
3.00%
1.50% |
Lodgings Privilege License Fee
General
Surcharge |
6.00%
$1 per room per night |
| Gasoline Privilege License Fee |
.01 per gallon |
| Liquor Privilege License Fee |
12% |
| Tobacco Tax |
$.10 per package,
$.03 per cigar
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| Wholesale Wine Tax |
.07 per liter |
Applying for a Tax Account Number
If you have a City business license, you are already set up to pay the taxes indicated in your license application. If you are not required to have a business license but are required to pay taxes, you must complete a tax application: City of Huntsville Tax Application.
When to File and Pay Taxes
All tax forms and payments are due monthly, except that some sales, use and rental taxes may be paid quarterly or annually depending on your business activities. Contact the Finance Department for information.
File Taxes Electronically
Taxpayers save considerable time and expense by filing and paying certain city and state taxes electronically, including the City of Huntsville. Taxpayers are encouraged to visit the online filing website at Tax Return E-Filing or visit the Alabama Department of Revenue website at Alabama Department of Revenue
Authorizing Other Parties to Discuss Tax Matters
If you desire to authorize other parties to discuss your tax matters with city representatives, you must complete and provide the city an authorization form, which is available at Tax Authorization Form.
Transactions Inside the City of Huntsville
Transactions occurring inside the corporate limits of Huntsville are those that are subject to tax according to applicable city law. It is the TAXPAYER'S RESPONSIBILITY (in the case of retail sales, it is the SELLER'S RESPONSIBILITY) to determine whether a transaction occurs in Huntsville.
IMPORTANT NOTE: U.S. Post Office addresses do not indicate Huntsville's geographic boundaries.
To determine the location of a transaction, you may refer to the Huntsville Address Locator, which is a current listing of all addresses inside Huntsville. For locations not having a postal address (such as new real estate developments), you should contact the City Planning Department for assistance at (256) 427-5100.
Businesses Providing Services
Many businesses primarily sell services, not merchandise to their customers, such as health care and dental professionals, attorneys, accountants, engineers, appraisers, software consultants, U.S. Government contractors, architects, and real estate agents. Although you may not be required to collect sales tax, it is very likely you are required to pay city use tax on materials, supplies, computer equipment, and other property used in your business, whether provided to your customers or not. Please refer to the other information on this website concerning use tax.
Automotive Vehicle Dealers
Automotive vehicle dealers are required to collect sales tax on the sale of all vehicles in the city. This does not apply to vehicles delivered outside Huntsville, "delivery" being defined by Alabama law. If a dealer delivers a vehicle outside Huntsville, the dealer is required to complete the State's "Certificate of Exemption - Out of State/City/County Delivery" ("State Form") for the sale to be exempt, which is available from the Alabama Department of Revenue.
The matter of delivery outside of Huntsville is complex and must comply with Alabama law concerning what constitutes delivery and passage of title. The DEALER IS RESPONSIBLE for determining whether a delivery location is inside or outside the city, and may refer to the Huntsville Address Locator for reference.
For the exemption to be accepted by the city, the dealer must submit the original or copy of all State Forms executed for the tax reporting period with the tax return for the period.
IMPORTANT NOTE: The State Form does not apply to sales to individuals or businesses having a Huntsville address according to the then applicable Huntsville Address Locator, regardless of the point of delivery. If such a sales is claimed as exempt by a dealer and the city discovers such, AND the city discovers the Madison County License Director did not collect the city sales tax from the buyer upon registration of the vehicle, the city will assess the sales tax on the sale to the dealer, plus a penalty for failure to pay the tax timely.
Also, if the city discovers from the buyer that the vehicle was not delivered outside the city, contrary to the State Form, the city will assess the sales tax on the sale to the dealer, plus a penalty for failure to pay the tax timely.
The city will assess sales tax on the sale to the buyer if the city finds the dealer properly exempted the sale but for other reasons finds the buyer owes the tax.
Business Record keeping Requirements
All individuals and entities having a city business license are required by law to keep records that clearly show all transactions subject to city privilege licenses and taxes. This includes, but is not limited to records showing:
All income of the business, whether by cash, check, credit or property.
Customer invoices establishing the delivery location of business merchandise and taxes collected.
Customer sales tax exemption documents, when applicable.
All banking activities.
All purchases by the business, whether by cash, check, credit or property.
Invoices from vendors.
Payroll records.
Real and personal property owned by the business.
Failure to keep proper records and make them available upon the city's request constitutes a misdemeanor offense for which the city may issue a citation for observed violations. You are strongly encouraged to consult with your advisors about the law's requirements, or contact city for more information. Retail businesses receiving primarily cash are especially encouraged to establish proper recordkeeping procedures to avoid city penalties.
Use Tax
Use tax is traditionally the most confusing tax, and should be of particular interest to individuals and businesses engaged in construction, contracting, and services, but it is very likely that every person and business is subject to use tax to some degree.
Use tax, at the same rates as sales tax, becomes due when the user and consumer of taxable goods does not pay tax to the seller, or pays tax to an seller that is not registered to collect City of Huntsville tax. Use tax is due on purchases made by Huntsville residents and businesses from another city or state which are not taxed.
Generally, if you would be required to pay sales tax on goods purchased inside Huntsville, but you purchase them outside Huntsville and do not pay local sales tax, you are probably subject to use tax and must report and pay it to the city.
You are strongly encouraged to consult with your advisors or ask city representatives about how use tax applies to your activities.
Other Information
Frequently Asked Questions
City of Huntsville Tax Application
City of Huntsville Standard Tax Form
Tax Return E-Filing
Alabama Department of Revenue
City Laws Online
City Tax Rules
Huntsville Address Locator
Tax Authorization Form
Voluntary Tax Disclosure Agreement
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