# Alabama Sales Tax Guide (2026)

Canonical: https://trykintsugi.com/sales-tax-guides/usa/alabama
Published: June 17, 2026

Alabama's 4% state rate climbs to nearly 11% once local taxes stack on top. Remote sellers cross economic nexus at $250,000 but can skip the local maze by filing the flat 8% Simplified Sellers Use Tax.

- **SaaS:** Exempt
- **Clothing:** Taxable
- **Groceries:** Taxable
- **Digital Goods:** N/A

- **Effective date::** 
- **Scheduled change::** 

## Key Takeaways

Alabama's state sales tax rate is 4%, and local city and county taxes push combined rates to about 10% in major cities; remote sellers can instead collect a flat 8% through the Simplified Sellers Use Tax (SSUT) program [1][2]. You have economic nexus once retail sales into Alabama exceed $250,000 in the prior calendar year, with no transaction-count trigger [2]. SaaS is not taxable in Alabama, and groceries are taxed at a reduced 2% state rate as of September 1, 2025 [1]. A final assessment must be appealed within 30 days to the Alabama Tax Tribunal [6].

## Taxability Snapshot

## Sales Tax Rates

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%.

| Component | Rate | Scope |
| --- | --- | --- |
| State | 4.00% | Statewide |
| Local (city + county) | up to ~7% | Varies by location |
| Combined | 4.00%–~11% | Varies by location |
| SSUT (remote sellers) | 8.00% | Flat, optional |

Combined rates in major Alabama cities (2026):

| City | Combined rate |
| --- | --- |
| Birmingham | 10.00% |
| Montgomery | 10.00% |
| Mobile | 10.00% |
| Tuscaloosa | 10.00% |
| Huntsville | 9.00% |

To find the combined rate for a specific address, use our [US sales tax calculator](/us-sales-tax-calculator).

## Registration or Nexus Threshold

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.

## Marketplace Facilitator Law

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]

## Filing Frequency & Deadlines

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.

#### Exemptions

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.

## Resale & Exemption Certificates

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].

## Penalties

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.

## Audits & Appeals

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].

## Sources

- [1] [Alabama DOR — State Sales & Use Tax Rates](https://www.revenue.alabama.gov/sales-use/state-sales-use-tax-rates/)

- [2] [Alabama DOR — Simplified Sellers Use Tax (economic nexus, flat 8%)](https://www.revenue.alabama.gov/sales-use/simplified-sellers-use-tax-ssut/)

- [3] [Alabama DOR — Rule 810-6-1-.37 (computer software taxable)](https://www.revenue.alabama.gov/wp-content/uploads/2021/12/810-6-1-.37-.pdf)

- [4] [Alabama DOR — Sales Tax Holidays](https://www.revenue.alabama.gov/sales-use/sales-tax-holidays/)

- [5] [Alabama DOR — Certificate of Exemption validity and renewal](https://www.revenue.alabama.gov/faqs/how-long-is-the-certificate-of-exemption-valid/)

- [6] [Alabama DOR — Appeal rights for a final assessment (30 days)](https://www.revenue.alabama.gov/faqs/when-do-the-appeal-rights-for-a-final-assessment-expire/)

- [7] [Alabama DOR — How to register (My Alabama Taxes)](https://www.revenue.alabama.gov/faqs/how-do-i-apply-or-register-for-a-sales-tax-number/)

- [8] [Alabama Department of Revenue — Simplified Sellers Use Tax (SSUT)](https://www.revenue.alabama.gov/sales-use/simplified-sellers-use-tax-ssut/)

Verified July 2026 against Alabama Department of Revenue published guidance.

## Frequently Asked Questions

### What is the Alabama sales tax rate in 2026?

4% state, with combined city and county rates reaching about 10% in major cities and over 11% in places.

### What is Alabama's economic nexus threshold?

$250,000 in retail sales into Alabama in the previous calendar year — higher than most states. There is no transaction-count trigger.

### What is Alabama's SSUT program?

The Simplified Sellers Use Tax lets remote sellers collect a flat 8% and file one return instead of tracking Alabama's many local rates.

### Is SaaS taxable in Alabama?

No. SaaS is not taxable in Alabama.

### When are Alabama sales tax returns due?

The 20th of the month following the reporting period, filed through My Alabama Taxes.

### What is the penalty for late Alabama sales tax?

10% of the tax due (or $50 for a late return, whichever is greater), plus interest.

## Related Reading

- [What Is Alabama SaaS Sales Tax and Why Does It Matter?](/blog/alabama-saas-sales-tax)

## US Sales Tax Calculator