Alabama Sales Tax Guide (2026)

Alabama levies a 4% state sales and use tax. City and county taxes are high, pushing combined rates to about 10% in major cities and over 11% in a few places. Remote sellers can avoid the local-rate complexity by enrolling in the Simplified Sellers Use Tax (SSUT) program and collecting a flat 8%.

Combined rates in major Alabama cities (2026):

To find the combined rate for a specific address, use our US sales tax calculator.

Alabama economic nexus applies once your retail sales into the state exceed $250,000 in the previous calendar year, a higher threshold than most states. There is no transaction-count trigger. Physical presence creates nexus immediately.

Alabama's marketplace-facilitator collection requirement took effect January 1, 2019, under Act 2018-539 and its implementing rules, administered through the Simplified Sellers Use Tax (SSUT) program. A marketplace facilitator with $250,000 or more in retail sales into Alabama in the preceding 12 months — combining its own direct sales with sales made through its marketplace by marketplace sellers — must either register to collect and remit the flat 8% SSUT on those sales or comply with notice-and-reporting requirements instead. Sales made through a participating facilitator that collects SSUT are excluded from the marketplace seller's own $250,000 threshold calculation, though sellers remain responsible for tax on their own direct sales and on sales made through non-participating facilitators.[8]

Alabama assigns monthly, quarterly, or annual filing based on tax volume. Returns are due the 20th of the month following the reporting period, filed through My Alabama Taxes. SSUT returns follow the same monthly schedule.

Alabama taxes groceries at a reduced state rate (cut to 2% in September 2025), though local taxes may still apply. Prescription drugs are exempt. SaaS is not taxable in Alabama.

Alabama issues a certificate of exemption for qualifying resale and exempt purchases, applied for on Form ST: EX-A1 [5]. Unlike many states, the certificate is valid for only one year and must be renewed annually before the end of its expiration month [5]. A seller who accepts a valid certificate in good faith is relieved of tax on that sale [5].

Late filing or payment carries a penalty of 10% of the tax due (or $50 for a late return, whichever is greater), plus interest from the due date.

After an audit, the Department of Revenue issues a final assessment for tax owed. You have 30 days from the date the final assessment is mailed or personally served to file a written notice of appeal with the independent Alabama Tax Tribunal [6]. Missing the 30-day window makes the assessment final [6].

• [1] Alabama DOR — State Sales & Use Tax Rates

• [2] Alabama DOR — Simplified Sellers Use Tax (economic nexus, flat 8%)

• [3] Alabama DOR — Rule 810-6-1-.37 (computer software taxable)

• [4] Alabama DOR — Sales Tax Holidays

• [5] Alabama DOR — Certificate of Exemption validity and renewal

• [6] Alabama DOR — Appeal rights for a final assessment (30 days)

• [7] Alabama DOR — How to register (My Alabama Taxes)

• [8] Alabama Department of Revenue — Simplified Sellers Use Tax (SSUT)

Verified July 2026 against Alabama Department of Revenue published guidance.

• What Is Alabama SaaS Sales Tax and Why Does It Matter?