Alabama: Sales Tax Handbook

Alabama Sales Tax Rate

2024 Alabama Sales Tax Handbook

Alabama Table of Contents

• List of Local Sales Tax Rates
• Sales Tax Calculator
• Sales Tax Exemption Certificates
• Sales Tax Info For Businessowners
  • Getting A Sales Tax Permit
  • Filing Your Sales Tax Return
  • Sales Tax Return Filing Schedule
  • What Defines Sales Tax Nexus?
  • Appealing Sales Tax Audits
• Taxable vs. Non-Taxable Purchases
  • What Sales Are Taxable?
  • Sales Tax Exemptions
  • Sales Tax Basis Components
  • Alcohol Excise Taxes
  • Tobacco Excise Taxes
  • Gasoline & Fuel Excise Taxes
  • Marijuana Taxes
• Sales Tax on Cars & Vehicles
• More Information
  • State Sales Tax Map
  • State Sales Tax Rate Table
  • Recent Tax Rate Changes
  • List of Sales Tax Holidays
  • Contact the Department of Revenue

These rankings show how the Alabama sales tax compares to the other 49 states + DC. The state with the highest sales tax is ranked 1st, and states with the same sales tax have a tie rank.

Alabama's Sales Tax By The Numbers:

Alabama has a lower-than-average state sales tax rate of 4%, but the actual combined sales tax rates are higher than average when local sales taxes from Alabama's 364 local tax jurisdictions are taken into account.

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Rankings by Average State + Local Sales Tax:

  Ranked 5th highest by combined state + local sales tax

  Ranked 31st highest by per capita revenue from state + local sales taxes ($863 per capita)

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Rankings by State Sales Tax Only:

  Ranked 22nd highest by state sales tax rate

  Ranked 43rd highest by per capita revenue from the statewide sales tax ($483 per capita)

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AL City & County Taxes

AL Sales Tax Calculator

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Printable PDF Alabama Sales Tax Datasheet

What is exempt from sales taxes in Alabama?

Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Alabama taxes five types of commonly-exempted goods:

Clothing

  4%

Groceries

  4%

Prepared Food

  4%

Prescription Drugs

  EXEMPT

OTC Drugs

  4%

For more details on what types of goods are specifically exempt from the Alabama sales tax see Alabama sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Alabama? Taxation of vehicle purchases in particular are discussed in the page about Alabama's sales tax on cars.

Are services subject to sales tax in Alabama?

"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Alabama, services are generally not taxable.

About the Alabama Sales Tax

The state of Alabama has relatively simple sales tax rate, and utilizes a flat state tax rate. However, in addition to the flat state tax rate, there are county taxes or local city taxes, which will vary significantly depending on which jurisdiction you are in. These local tax rates would be in addition to the state rate.

It is worth noting that Alabama is one of the few states which which does not exempt food from the state's taxes.

Is the Alabama Sales Tax Destination-Based or Origin-Based?

Alabama is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Alabama from a Alabama vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.

Is Alabama a Streamlined Sales Tax State?

Alabama is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.

Contact the Alabama Department of Revenue

The Alabama Sales Tax is administered by the Alabama Department of Revenue. You can learn more by visiting the sales tax information website at www.revenue.alabama.gov.

Phone numbers for the Sales Tax division of the Department of Revenue are as follows:

• Local Phone: (334) 242-1490

Learn More: Our Book Recommendations

If you would like to learn more about how to manage your Alabama sales taxes, we recommend the following books:

Small Business Taxes For Dummies

This introductury book assists both current and aspiring small business owners with important tax planning issues, and covers a wide variety of small business tax topics.

Buy on Amazon

A Guide to Sales and Use Tax

This book provides information and insights on how to comply with a multitude of sales and use tax laws and regulations. This is our recommendation if you need an in-depth look into sales taxes.

Buy on Amazon