Alabama Department of Revenue

The Alabama Department of Revenue enforces the revenue laws of Alabama. Established in 1939 by the Alabama State Legislature, the Alabama Department of Revenue (ADOR) collects state taxes for the purpose of funding Alabama's governmental operations and services. The agency was founded under Gov. Frank M. Dixon in 1939 to provide financial oversight and ensure adequate funding of government services. It is located in the Gordon Persons Building in Montgomery, Montgomery County.


The history of the ADOR can be traced back to the late nineteenth century. During a session from November 1898-February 1899, the state legislature passed an act that created the office of the state tax commissioner. The act authorized the commissioner to collect taxes and licensing fees and granted authority to prosecute, both criminally and civilly, those who failed to pay taxes. In 1907, the State Tax Commission was created under the State Board of Assessment; the commission's duties were absorbed in 1915 into the Alabama State Board of Equalization.

The State Tax Commission found new life with the passage of the General Revenue Act of 1919, which granted it additional authority to tax business activities, such as licensing fees for commercial shipping and motor vehicles. The act also provided the commission with the power to collect fees from individuals for licensing motor vehicles. The role of the commission expanded with the Revenue Act of 1923, which directed commission officials to assess and tax the financial shares of domestic corporations.

Over the next decade, the State Tax Commission began to levy and collect taxes in numerous other areas, including tobacco sales, commercial transportation such as rail lines and motor buses, and electricity generation. In part, the increased role of the commission was spurred from recommendations in a 1932 report from the Brookings Institution, a Washington, D.C.-based public policy organization. The report, which was conducted at the request of then-Alabama governor Benjamin Miller, found several budgetary discrepancies as well as a general lack of financial oversight in state spending. To avoid major budget shortfalls, the Brookings report determined that the Alabama government would need to levy additional taxes, such as a graduated income tax and a tax on gasoline sales.

The state addressed the concerns cited in the Brookings Report by expanding the role of the State Tax Commission in succeeding years. In 1935, the commission began collecting a graduated state income tax, in which individuals with higher incomes paid a higher proportion of taxes than those with lower incomes. Given its expanded role in collecting taxes, the state centralized the commission's authority as an office of assessment and collection with the Revenue Act of 1935. This move, along with the passage of the 1935 Department of Revenue Act, ultimately led to the dissolution of the State Tax Commission in 1939 and the creation of State Department of Revenue. Thus, the State Tax Commission's duties were assumed by the newly formed department, which continues to operate today under a single commissioner.


The chief duties of the Alabama Department of Revenue are numerous and comprehensive. First and foremost, the department is tasked with assessing all taxes and penalties that it is directed to under Alabama law, such as the assessment and collection of property taxes. To carry out these duties, the Department of Revenue can inspect and examine any available records of individuals or businesses that operate within the state. Similarly, the Department of Revenue has the authority to require any taxable person or organization to submit records or documentation it deems necessary to carry out its official duties. The department can bring charges against individuals if they fail to provide such records or to pay their taxes. In this sense, the Department of Revenue not only assesses and implements taxes policy but also enforces state tax code. Most tax code violations commonly relate to individuals or businesses committing tax fraud, such as failing to pay taxes due and misrepresenting taxable income.

Additionally, the ADOR examines the tax systems of other states to identify best practices that may benefit the citizens of Alabama. Other functions include consulting and conferring with the governor on the subject of taxes and the administration of the laws, as well as seizing personal property for failure to pay taxes) and garnishing the wages of people who do not pay child support or other debts such as outstanding medical bills.

The Department of Revenue is unique compared to other state agencies because it also collects the taxes that fund its operations. The Department of Revenue turns collected tax money over to the the State Fiscal Department at the close of each fiscal year and then receives a portion of those funds for its operating expenses through legislative appropriations, like other state agencies. The majority of the revenues collected by ADOR come from sales and income taxes. For fiscal year 2016, the department collected a record $9.9 billion dollars from taxes, up from $9.7 billion in fiscal year 2015. The majority of state tax revenues fund government services such as education and Medicaid, which constituted an average of approximately 64 percent of total state expenditures between fiscal years 2010-2014. The rest of the revenue goes to fund other state agencies and initiatives.


The Department of Revenue consists of 12 divisions and is headed by a commissioner appointed by the governor who serves as the chief executive officer of the department. This individual is responsible for overseeing the operation and management of the ADOR and is also the Ex-Officio Land Commissioner, and as such oversees all transactions related to state property. Reporting directly to the state commissioner are five units, which include: Investigations; Equal Employment Opportunity Office; Communications and Publications; Legal; and Governmental Relations. Additionally, four deputy commissioners report directly to the commissioner and are responsible for overseeing the following divisions: Business and License Tax; Collection Services; Human Resources; Individual and Corporate Tax; Investigations; Motor Vehicles; Processing; Property Tax; Sales and Use Tax; Tax Incentives; Tax and Policy Research; and Taxpayer Advocacy. The ADOR also operates nine Taxpayer Service Centers in Alabama's major metropolitan areas. These offices offer tax assistance to individuals and businesses across the state. An assistant commissioner assumes the duties of the commissioner whenever that individual is absent.

With an increased need for technological expertise in recent years, the ADOR has streamlined delivery of its services by taking advantage of the Internet and other related electronic resources. In 2012, for example, the Alabama Legislature established the Optional Network Election for Single Point Online Transactions, known as One Spot. This online portal enables individual Alabama taxpayers and businesses to pay all state, county, and municipal taxes online. The increased use of electronic tax-systems has also created additional challenges, however. In 2015, the agency disclosed that some Alabama citizens using third-party electronic filing systems may have been victims of fraud. In response, the Alabama Department of Revenue has taken additional steps to secure its own electronic systems through features such as the "ID Confirmation Quiz." This security feature allows taxpayers to verify their identity, decreasing the likelihood that they will become victims of tax fraud or identity theft. In spite of these challenges, the Department of Revenue will continue to focus on the needs of individual and business owners in order to effectively accomplish their mission.

The agency headquarters is located at 50 North Ripley Street in the state capital, Montgomery, on the corner of Monroe Street and North Ripley Street.

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Alabama Department of Revenue Seal

Alabama Department of Revenue Seal