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Alabama Sales Tax

On this page you will find handy sales and use tax information about Alabama.

How to use this page:

We’ve pulled in the information from all our Charts for a consolidated view by state.  Here you can see the sales tax rates and if the state has remote seller nexus rules. You can also see any sales tax holidays or amnesty programs that may exist, though these do not apply to all states.

Below the chart you can find any News & Tip item we have published that relates to Alabama that you can filter by topic. This will help you get informed on current and past legislation that has passed in the state.

State Sales Tax Rates
State Rate

4.000%
Range of Local Rates

0% – 9.0% Some local jurisdictions do not impose a sales tax.
Local Rates Apply to Use Tax

Yes/No  Some of the cities and counties do apply use tax.
Remote Seller Nexus Rules
AFFILIATE NEXUS

8/24/2012
REPORTING REQUIREMENTS

7/1/2017
ECONOMIC NEXUS

10/1/2018 – see state notice
MARKETPLACE NEXUS

1/1/2019
Sales Tax Holidays
Severe Weather Sales Tax Holiday

February 20, 2026 – February 22, 2026

No state sales or use tax is due on certain items you may purchase to deal with severe weather (Act 2012-256, Rule 810-6-3-.66). See here for the counties and municipalities that have notified ALDOR of their decision to participate or not participate in the holiday.
Back to School Sales Tax Holiday

July 17, 2026 – July 19, 2026

1. Clothing for $156 or less per article
2. Computers, computer software, and school computer supplies with sales price of $1,173 or less
3. Books with a sales price of $47 or less
4. School supplies, school art supplies, and school instructional material with sales price of $78 or less
Participating jurisdictions for the holiday have been updated to include Rainsville, and holiday rules will align with the state’s baby items and female items sales tax exemption.
Click here for a quick reference sheet of exempt items.
Grocery Tax Holiday

May 1, 2026 – June 30, 2026

Removes the 2% state-level sales tax on food. The suspension applies only to the state portion, meaning local city/county taxes may still apply. For more information, click here.
Sales Tax Amnesty
Status

Inactive

Amnesty Filing Dates

June 30, 2016 - August 30, 2016

Go to Alabama Amnesty Page
AMNESTY INCLUSION PERIODS

Taxes due prior to January 1, 2015 or taxes for taxable periods that began before January 1, 2015 are eligible.

TAX TYPES AND CONDITIONS

All taxes administered by the Alabama Department of Revenue, except for motor fuel taxes and certain penalties
AMNESTY BENEFITS

50% of interest and all penalties waived.

Status

Inactive

Amnesty Filing Dates

July 1, 2018 - September 30, 2018

Go to Alabama Amnesty Page
AMNESTY INCLUSION PERIODS

Taxes due prior to January 1, 2017 and taxes for taxable periods that began before January 1, 2017.

TAX TYPES AND CONDITIONS

All taxes administered by the Alabama Department of Revenue except for motor fuel, motor vehicle, and property taxes.
AMNESTY BENEFITS

Waiver of penalties and interest. However, penalties may be imposed for reasons such as failing to comply with the amnesty provisions, providing false or fraudulent information, and/or cost of collection penalties.

Status

Inactive

Amnesty Filing Dates

Amnesty is provided to any eligible seller who applies and is accepted to participate in the Simplified Seller’s Use Tax (SSUT) Program

Go to Alabama Amnesty Page
AMNESTY INCLUSION PERIODS

Periods preceding October 1, 2019

TAX TYPES AND CONDITIONS

Simplified sellers use tax. Seller must apply for and be accepted into SSUT program. Amnesty isn’t available to any eligible seller who has received notice of an audit and the audit is not yet resolved.  Amnesty only applies to retailers responsible for collection of the tax and not for purchasers subject to consumer’s use tax.
AMNESTY BENEFITS

Waiver of penalties and interest, and no class action may be brought against an eligible seller in any court of this state on behalf of customers for an overpayment of simplified sellers use tax.

Administration Information
Streamlined Sales Tax Status

Advisory State
NUMBER OF TAXING AUTHORITIES

801 Sales Tax Jurisdictions

HOME RULE AUTHORITIES

Yes – Combination; some are state administered
Sales Tax Sourcing (Intrastate)

Destination
Sales Tax Return Due Date

The 20th of the month following the reporting period
Exemption Information
RESALE CERTIFICATE

Alabama Resale Certificate
TYPES OF EXEMPTIONS

Product types of exemptions: prescription drugs, gasoline and motor oil, fertilizer, seeds, livestock feed, labor to repair or install property if billed separately

 

Entity types of exemptions:  sales to the government, schools, city and county owned hospitals, and specific nonprofits,

 

Alabama Exemption Certificate Forms
State Links
State Tax Web Page

Alabama Department of Revenue
Rate Look-Up Page

Alabama Sales Tax Rate Look-Up
Registration Link

Register for Alabama Sales Tax
History & Fun Facts
HISTORY

Alabama enacted its sales and use tax in 1936. It was re-enacted twice, once in 1939 and again in 1959.
FUN FACTS
  • Alabama is one of the five states with the highest combined state and local tax rates in 2022, at 9.24%.

Alabama Clothing, School Supplies, Computer Items Exempt on Holiday

Beginning in 2006, (starting on the first Friday in August), there will be an annual, three-day sales and use tax holiday for purchases of covered items. Exempt items include: clothing, including footwear (excluding accessories or sports equipment), which do not…

Federal Court Strikes Down Excise Tax.

The Federal District Court in Ohio ruled that the IRS may only collect the federal excise tax for long-distance telephone service on charges that vary by the distance of the calling parties and by the duration of each transmission.

Senate Bill to Force Remote Sellers to Collect Tax in SST States.

Two bills brought to Congress by Senators Byron Dorgan (D-N.D.) and Mike Enzi (R-Wyo) would nullify the “physical-presence” requirement for nexus as stipulated in Quill Corp. v. North Dakota. The legislation requires a remote seller to an SST member state…

Alabama Rules Video Games Were Subject to Lease Tax.

A hearing was conducted on December 6, 2004 in Birmingham, Alabama, in regards to a taxpayer owning video and other coin-operating amusement game equipment and leasing it to various businesses in Alabama. As a Taxpayer, it performs a standard lease…

Senator George Allen to Request Federal Excise Taxes on Telephone Services not Apply to Internet Communications.

A recent article by Stephen K. Cooper of the CCH News Staff noted that Senator George Allen (R) of Virginia introduced legislation to prohibit federal excise taxes imposed upon telephone services from applying to internet communications. Such internet communication services…

Virginia Rules That Lease Was Object of Transaction.

In a Virginia Supreme Court case, it was determined that a taxpayer who leased portable toilets was responsible for taxes on proceeds from pumping service charges because the true object of the transactions was the lease of the portable toilet…

COST Issues Study Discussing Sales Taxation of Business Inputs.

COST recently issued an economic study prepared by a third party surrounding the impact of extending sales tax to business services as well as an analysis of the current sales tax on business purchases.

IRS Releases Tax Tables for 2004 Sales Tax Deduction.

The IRS has released tables for the 2004 sales tax deduction that was instituted by the American Jobs Creation Act of 2004.

Alabama Discusses Taxability of Medical Record Processing.

In a revenue ruling, the Alabama Department of Revenue discussed the taxability of medical record processing services. Fees that were related to intangible services were not taxable. Separately stated flat fees for record location, photocopying fees and handling fees were…

US District Court Rules on Telephone Service

The United States district court ruled that a telephone service provider was entitled to a refund of federal excise tax since the service provided did not fall under the definition of “toll telephone service.” The taxed service is defined as…

Federal Government Will Continue to Collect Excise Tax.

The IRS released a statement addressing the excise tax levied under § 4251 of the Internal Revenue Code.

Alabama use tax due on purchase of long haul trucks.

An Alabama trucking company believed their purchases of long haul trucks within the state did not make them liable for an assessed use tax by the Department of Revenue. In Alabama, use tax applies to all purchases of property, no…

Alabama trucking companies may be liable for use tax.

This is possible when trucking companies use using trucks in the state to fulfill client contracts even if the taxpayer was exempt from paying sales tax on their initial purchase of these same trucks. Certain trucking companies were taking advantage…

Alabama retailer responsible for tax on construction supplies and devices.

In Alabama, a retailer selling highway construction supplies and devices tax-free to contractors doing contract work for the Alabama Department of Transportation was found liable for sales tax. The items sold included permanent and temporary signs, barrels and cones, flashing…

Alabama allows companies to remain separate for tax purposes even with the same owner.

Under current Alabama law interpretations, two companies can be owned by the same parent company and be treated as two separate companies for sales and use tax collection responsibilities. One company having nexus in Alabama does not require that another…

Alabama oil rollers and toner cartridges not taxable.

In Alabama, the purchase of oil rollers and toner cartridges was exempt from sales tax. It was determined that the oil from the oil rollers and the toner from the toner cartridges were exempt component parts of printed material produced…

Alabama is requiring state sales and use taxes to be filed electronically.

Taxes that must now be filed electronically are State Sales, Use, Rental, or Leasing, Lodgings, Utility Gross Receipts, Utility Service Use, Mobile Telecommunications Service, Contractor’s Gross Receipts, Pharmaceutical Providers, Alabama Nursing Home Privilege and State Administered Local Sales, Use, Rental,…

Alabama nexus for foreign entities.

Effective August 1, 2003, in Alabama, an out-of-state vendor establishes nexus for state and local use tax purposes if that vendor and an in-state business with one or more Alabama locations are related parties and (1) share the use of…

Permanent ban on Internet taxes a possibility.

Many panelists and lawmakers have been in discussions recently to decide what the implications of trying to establish an Internet tax will have on electronic commerce. A push for the enactment of the Internet Nondiscrimination Act (H.R. 49) has been…

Mobile Telecommunications Act

Under this act, the taxable definition of telecommunication service has been amended to include mobile telecommunications services. The provisions of the federal Mobile Telecommunications Sourcing Act (P.L. 106-252), effective August 1, 2002, states that a customer’s home service provider will…

Alabama electronic filing available.

Beginning with the November 2002 state and local returns, the option became available for Alabama taxpayers to file the state’s sales, use, rental, lodging, and income tax withholding returns online using the DOR website. There is no charge for this…

Alabama personal television services exempt from tax.

In Alabama, any service which assists people with recording programs for later use, pauses or records live broadcasts, programs personal settings for viewing, and/or allows reception of special content through a personal television is exempt from state sales and use…

Local sales and use tax nexus case is upheld in Alabama.

The Alabama Supreme Court will not hear the case of Yelverton\’s, Inc. v. Jefferson County, which allows the opinion of the Court of Civil Appeals to stand.