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Every step to open an LLC in Alabama and get ready to hire, in order, with the official state page for each one. Agencies you'll deal with: Secretary of State · Department of Revenue · Department of Workforce.
This is the most common path: a new LLC, general business, paying W-2 employees and 1099 contractors. Adding a location, forming a corporation, or in a licensed industry? Customize it and check off steps as you go.
Customize this checklistPopular Alabama business types:
Do this first. The state tax and payroll accounts ask for your registration details.
Apply free on the IRS website and get the number immediately. You'll need it for the state tax registration, a business bank account, and payroll. Opening a new location? You already have one; the same EIN works in every state.
This internal document sets out who owns what, how decisions get made, and what happens if an owner leaves. It isn't filed with the state, but banks often ask for it, and it helps protect your liability shield. Single-owner LLCs need one too.
Bring your EIN letter, filed formation documents, and operating agreement or bylaws. Keeping business and personal money separate is one of the main things that protects your personal assets.
Many businesses need a license or permit before opening, separate from registering the company. Check three levels: the state licensing board for your field, your city or county, and any federal agency that regulates your industry.
If you want S corp taxation, file IRS Form 2553. The deadline is tight: generally within 2 months and 15 days after the start of the tax year you want it to apply. See Business basics for when it makes sense.
File Articles of Organization (or the state's equivalent) online through Alabama Secretary of State Online Business Services.
You need a registered agent with a street address in Alabama to receive legal papers and state notices. Use a registered agent service if you have no one local.
No general state DBA filing. Trade names can be registered with the Secretary of State as marks (5-year term).
A Certificate of Name Reservation is required before filing ($25, or $28 online). Every LLC and corporation must also file an initial Business Privilege Tax return within 2.5 months of forming.
Register for withholding and sales tax accounts through My Alabama Taxes (MAT).
Some localities levy an occupational tax on wages that employers withhold, such as Birmingham (1%), Bessemer, Gadsden, Jefferson County, and Macon County. Businesses also need a state/county business license from the county probate office and a city license from the city clerk.
LLCs and corporations file Form BPT-IN within 2.5 months of forming, then an annual return due with the federal return. If the tax due is $100 or less, no annual return is required.
Applies if you sell products, or services this state taxes. Most medical care is exempt. See Business basics for sales tax.
Alabama calls it a Sales Tax License. Register with the Alabama Department of Revenue through My Alabama Taxes (MAT) before you make your first taxable sale in Alabama. You'll collect tax from customers and send it to the state.
Give your supplier Alabama Sales Tax License (serves as the resale certificate) so you don't pay tax on inventory you'll resell. Alabama calls the resale certificate a Sales Tax License, and buyers print a copy from My Alabama Taxes. Remote resellers without an Alabama license can give their home-state resale certificate on drop shipments. Keep certificates your own customers give you, too.
Out-of-state sellers must register once sales into Alabama pass $250,000 (previous calendar year), even with no office here.
Alabama does not issue sales tax licenses to remote sellers; they register for the SSUT program, collect a flat 8%, and keep a 2% timely-filing discount capped at $8,000 a month.
Applies once you pay W-2 employees who work in this state.
Form I-9 is never mailed to the government. You keep it in your own files and show it only if ICE or the Department of Labor asks for an inspection.
Federal posters (minimum wage, EEO, FMLA if you have 50+ employees, and others) go alongside the state ones.
Register once you pay wages to employees working in Alabama. Reports and payments are usually quarterly.
Required at 5 or more employees. The count includes part-time and full-time workers, corporate officers, and LLC members, but not contractors.
Report within 7 days of hire or rehire. Employers with 5 or more employees must report online. Independent contractors are not reported.
All employers, public and private, must use E-Verify for every new hire (Beason-Hammon Alabama Taxpayer and Citizen Protection Act, since April 1, 2012).
Alabama's wage payment rules:
$7.25 (federal; no state minimum wage law) an hour.
No paid sick leave law.
No state retirement savings mandate.
Alabama doesn't require harassment training for private employers. A written policy and a yearly refresher are still best practice.
Display the state's required labor law posters where employees can see them, along with the federal posters. Workers' comp notices come from your carrier.
If employees work in a city or county with an occupational tax, such as Birmingham, withhold it from wages and file with that locality.
Alabama requires every employer to verify new hires through E-Verify.
The W-9 gives you the contractor's legal name and tax ID for their 1099. Check the classification first: if you control how and when they work, they may legally be an employee.
File with the IRS and send the contractor a copy by January 31. For payments made in 2026 and later, the reporting threshold is $2,000 per contractor per year (it was $600 before).
Recurring deadlines. Put these on your calendar now.
FinCEN's final rule, effective August 14, 2026, permanently exempts companies formed in the U.S. from beneficial ownership reporting. Ignore letters or emails demanding a BOI filing fee; they're a common scam. Only companies formed outside the U.S. still file.
Keeps your business in good standing with the state. Missing it can lead to penalties or dissolution.
Business Privilege Tax is filed with the Department of Revenue, online through My Alabama Taxes. Form BPT-IN (initial return) is due within 2.5 months of forming or qualifying, with no extension.
File unemployment wage reports each quarter and state withholding returns on the schedule you're assigned (if the state has income tax), plus the annual W-2 reconciliation.
SSUT returns are filed monthly and due by the 20th of the next month; in-state sellers file monthly, quarterly or annually based on tax volume, also due the 20th. File a zero return if you had no sales; skipping it can bring penalties.
Recurring dates for Alabama and federal filings. A payroll service handles most payroll lines, but you should know they're happening.
| When | What | Filed with |
|---|---|---|
| Mar 15 / Apr 15 | Business Privilege Tax return, due with the federal return (CPT with annual report for C corporations) | Alabama |
| Apr 30, Jul 31, Oct 31, Jan 31 | Quarterly UI tax and wage report | Alabama |
| Jan 31 | Form A-3 annual withholding reconciliation with W-2s (e-file if 10 or more W-2s) | Alabama |
| Assigned schedule | Sales tax return (file a zero return if no sales) | Alabama |
| Jan 31 | W-2s to employees and SSA (with W-3); Form 940; 4th-quarter Form 941 | IRS / SSA |
| Jan 31 | 1099-NEC to contractors and IRS | IRS |
| 15th monthly | Federal payroll tax deposit (monthly depositors) | IRS |
| Apr 30 · Jul 31 · Oct 31 | Form 941 for the quarter | IRS |
| Jul 31 | Form 5500 or 5500-SF, if you sponsor a 401(k) (Oct 15 with Form 5558 extension) | DOL (EFAST2) |
Last verified: October 27, 2026
The Alabama state filing fee for an LLC is $200. That's the fee to form your LLC with the state. Expect other costs too, such as a registered agent service if you use one, licenses, and annual filings. See the checklist above for each step.
You need to register to collect sales tax in Alabama if you sell taxable products or services there. The state rate is 4%, and local taxes may add to it. Registration cost: See state site.
Out-of-state sellers must register once their sales into Alabama pass $250,000 a year. Having an employee or office in Alabama also creates nexus right away.
Recurring filings include: file the Business Privilege Tax return (Form PPT for pass-through entities; Form CPT, which includes the annual report, for C corporations); file quarterly unemployment reports and withholding returns; file sales tax returns on time. The deadline calendar above lists the dates.
This guide organizes official requirements. It isn't legal or tax advice. Fees, forms, and deadlines change, so confirm on each linked state page before you file, and talk to an attorney or CPA about your specific situation.
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