Sellers are not required to accept the sales tax license and sell products tax-free.  If the vendor, wholesaler, or dealer doesn’t accept the certificate, the buyer will have to pay sales tax on the merchandise being purchased.  In most cases, a credit for the sales taxes paid is available when filing the Alabama sales tax return.

When a business is presented with a request to sell items tax-free, it is the seller’s responsibility to verify the buyer’s information is correct.  Failing to verify this information may put the liability of paying Alabama sales taxes on the seller.

To verify whether the sales tax license is valid:
– Request a copy of the buyer’s Alabama sales tax license.
– Log on to My Alabama Taxes and click on “Verify a Sales Account”
– Sellers are also responsible for examining the certificate and evaluating whether the goods sold are reasonably consistent with the purchaser’s line of business.  For example, if the buyer’s business is a car dealership, but they want to purchase office supplies tax-free, the seller may want to investigate further.  
– While it’s not required, it’s a good idea to make a copy and file the sales account verification.       

No, a business license and a sales tax license are not the same thing. A business license is a general permit that allows a business to operate legally in a certain jurisdiction, such as a city, county, or state. A sales tax license is a specific permit that allows a business to collect and remit sales tax on taxable sales of goods or services.

Depending on its type, location, and activities, a business may need both a business license and a sales tax license.

Related: What business licenses are needed in Alabama?