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Alabama sales tax, explained.

Thresholds, rates, taxability, filing schedules, and My Alabama Taxes — everything a remote seller needs to know about Alabama, on one page.

Economic nexus threshold
$250,000
Statewide base rate
4%
Transaction threshold
None
BirminghamMontgomeryHuntsvilleMobileTuscaloosa
Alabama · major filing jurisdictions
Nexus · Alabama

When you owe sales tax in Alabama.

Either physical presence or economic activity on its own creates the obligation to register, collect, and remit. Alabama measures sales only — there is no transaction-count test.

Economic nexus
Threshold
$250,000 in retail sales of tangible personal property delivered into Alabama
Measurement type
Sales only — transaction count does not matter
Measurement period
Previous calendar year
Included
Retail sales of tangible personal property, including both taxable and nontaxable retail sales; excludes wholesale (resale) sales and marketplace-facilitated sales
Marketplaces
Marketplace-facilitated sales do NOT count toward your threshold — Alabama explicitly excludes TRANSACTION.MARKETPLACE from the calculation, so sales processed and remitted by Amazon, Etsy, or other registered marketplace facilitators are the facilitator's obligation, not yours
Physical nexus
Employees / remote staffOffice or leased propertyInventory · warehouse · 3PLAgents or representativesConstruction or installation

Any physical presence in Alabama creates nexus immediately, regardless of sales volume. Remote employees are the most common surprise for technology companies — a single Alabama-based employee triggers full registration and collection obligations from day one.

Rates · Alabama

What you'll collect, city by city.

Alabama's statewide base is 4%. Counties and municipalities stack additional rates on top, so the combined rate depends on the delivery address — and Alabama taxes digital goods alongside tangible property.

JurisdictionCombined rateTangible propertyDigital goodsSaaSServices
AlabamaStatewide base rate4%4%4%0%0%
Birmingham10%10%10%0%0%
Montgomery10%10%10%0%0%
Huntsville9%9%9%0%0%
Mobile10%10%10%0%0%
Tuscaloosa8.5%8.5%8.5%0%0%

Alabama is one of the few states that taxes digital goods at the same combined rate as tangible personal property. SaaS and professional services remain exempt statewide. Local rates (county + city) stack on top of the 4% state rate, so always use the delivery address to determine the correct combined rate. Rates verified as of June 11, 2026.

Need the exact rate for one address or invoice? Our calculator returns the combined state, county, and city rate for any Alabama address.

Open the sales tax calculator
Taxability · Alabama

Is your product taxable here?

Alabama has a broader taxability footprint than most states — digital goods are taxable alongside physical goods, though SaaS and professional services remain exempt.

Product categoryStatusWhat to know
Tangible personal propertyTaxablePhysical goods delivered into Alabama are taxable at the combined state, county, and city rate for the delivery address.
Digital goodsTaxableAlabama taxes digitally delivered products — such as downloaded software, digital media, and electronic publications — at the same combined rate as tangible property.
SaaS & cloud softwareNot taxableRemotely accessed software-as-a-service is exempt in Alabama for both B2B and B2C customers — no download means no taxable transfer of a product.
Professional servicesNot taxableGeneral and professional services — consulting, design, legal, IT services — are exempt from Alabama sales tax.
Bundled digital + SaaSPartialWhen a transaction bundles taxable digital goods with exempt SaaS, itemize the invoice clearly. The taxable digital component is subject to tax; the separately-stated SaaS subscription is not.
Filings · Alabama

Filing schedules and due dates.

The Alabama Department of Revenue assigns your filing frequency at registration based on expected tax liability. All returns are filed through My Alabama Taxes (MAT). Returns must be filed even for periods with no taxable sales.

FrequencyReturnDue dateWho it applies to
MonthlyMost commonSales, Use & Business Tax Return (filed via My Alabama Taxes)20th of the month following the reporting periodThe default assignment for most remote sellers with meaningful Alabama tax liability
QuarterlySales, Use & Business Tax Return (filed via My Alabama Taxes)20th of the month following the close of the quarter — Apr 20, Jul 20, Oct 20, Jan 20Sellers with lower Alabama tax liability, as assigned by the Department
Semi-annuallySales, Use & Business Tax Return (filed via My Alabama Taxes)20th of the month following the close of each semi-annual periodSmall sellers with minimal Alabama tax liability, as assigned
AnnualSales, Use & Business Tax Return (filed via My Alabama Taxes)January 20 for the prior calendar yearSellers with very low Alabama tax liability, as assigned by the Department

Crossed the threshold, or about to?

A Commenda expert will review your Alabama exposure, register you with the Alabama Department of Revenue, and take over the filing calendar — usually within a week.

The state authority

ADOR — Alabama's tax office.

The Alabama Department of Revenue administers sales and use tax through My Alabama Taxes (MAT), its unified online portal. Registration, filing, payment, and account management all happen in a single login.

myalabamataxes.alabama.gov

Registration requires a Tax Portal username and password. Out-of-state sellers register for the Seller's Use Tax (RUT) or may elect the Simplified Sellers Use Tax (SSUT) program. Have your business entity details and projected Alabama sales ready.

What you can do there
  • Register for a Seller's Use Tax account

    Out-of-state remote sellers register for Seller's Use Tax (RUT) or elect the Simplified Sellers Use Tax (SSUT) program — both free of charge through My Alabama Taxes.

  • File returns and pay

    All Alabama sales and use tax returns, payments, and amendments are submitted through your My Alabama Taxes account. ACH and card are both accepted.

  • Look up the rate for any address

    The ADOR address-based rate lookup returns the combined state, county, and city rate for any Alabama delivery address.

  • Verify a resale or exemption certificate

    Confirm that a buyer's exemption certificate or resale certificate is valid before accepting it and exempting the sale.

Exposure & exemptions · Alabama

If you're behind, or your buyers are exempt.

Back-period exposure & voluntary disclosure

Alabama offers a Voluntary Disclosure Agreement (VDA) program for out-of-state sellers who come forward before the Department contacts them. Acting first materially limits your exposure.

Lookback
Typically limited to 3 years under a VDA — versus an unlimited lookback if the ADOR initiates the audit
Penalties
Generally waived under the program
Interest
Still due on back taxes — only penalties are eligible for waiver
Unfiled returns
No statute of limitations applies until a return is actually filed

Exemption certificates accepted

Collect a valid certificate before exempting a sale and retain it on file. The burden of proof rests with the seller if the ADOR later questions the exemption.

Resale
Alabama Certificate of Exemption (Form ST-EX-A1) — required from buyers purchasing for resale
Multi-state
MTC Uniform Sales and Use Tax Certificate accepted for multi-state resale buyers; Alabama is not an SST member state
Nonprofit / government
Qualifying nonprofits and government entities may claim exemption — verify the buyer holds a valid Alabama exemption certificate before exempting
Agriculture & manufacturing
Qualifying machinery, equipment, and inputs used directly in agricultural or manufacturing production may be eligible for full or partial exemption

FAQ · Alabama

Alabama questions, answered.

The questions remote sellers ask us most about Alabama.
Read our FAQ library

Alabama's economic nexus threshold is $250,000 in retail sales of tangible personal property delivered into the state during the previous calendar year. There is no transaction-count prong — sales volume alone determines whether you have economic nexus.

No. Alabama explicitly excludes marketplace-facilitated sales from the threshold calculation. Sales processed and remitted by a registered marketplace facilitator like Amazon or Etsy are that facilitator's obligation — those sales do not accumulate toward your $250,000 limit.

No. Remotely accessed software-as-a-service (SaaS) is exempt from Alabama sales and use tax for both B2B and B2C customers. Because no software is transferred or downloaded, there is no taxable transaction under Alabama law.

Yes. Alabama taxes digitally delivered products — including downloaded software, digital media files, and electronic publications — at the same combined rate as tangible personal property. This is one of the key differences from states like California where digital goods are generally exempt.

Under Alabama's rule, registration is required by January 1 following the calendar year in which you exceeded $250,000 in qualifying sales. The threshold is measured on the previous calendar year only, not on a rolling basis.

The SSUT program is an Alabama option for out-of-state sellers that simplifies compliance by applying a single flat 8% rate to all Alabama sales, in lieu of calculating varying local rates for each delivery address. Participation is voluntary, and enrolled sellers remit through My Alabama Taxes.

Yes. A single Alabama employee, office, warehouse, or agent creates physical nexus immediately — no minimum sales volume applies. Technology companies with remote staff based in Alabama are the most common case where physical nexus exists well before the economic threshold is reached.

Yes. Commenda monitors your Alabama exposure, registers you with the ADOR through My Alabama Taxes, calculates the correct rate on every transaction, and files each return on the assigned schedule. Book a call to see it on your own data.

United States

Sales tax, state by state.

* No state-level sales tax. Alaska's local jurisdictions still enforce economic nexus through the ARSSTC.