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Sales Tax

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Sales Tax

Sales tax is a privilege tax imposed on the retail sale of tangible personal property sold in Alabama by businesses located in Alabama.

The tax is collected by the seller from their customer and remitted directly to the state. All sales of tangible personal property are retail sales except those defined as wholesale sales.

Wholesale sales are sales of tangible personal property to licensed retail merchants, jobbers, dealers, or other wholesalers for resale.

It does not include sales to users or consumers that are not for resale. The seller must maintain the sales tax number or exemption number for these customers.

State Sales Tax Rates

  • 1.5% of the net difference paid for farm machinery; this rate also applies to the gross receipts from sales of machines, parts, and attachments for machines used in manufacturing, processing, compounding, mining, and quarrying tangible personal property.
  • 2% of the net difference paid for new and used automotive vehicles, truck trailers, semi-trailers, and manufactured homes.
  • 3% of the retail sales price of food for human consumption sold through coin-operated vending machines.
  • 4% of the gross proceeds of sales of all tangible personal property, other than that listed previously and specifically exempted by law, and the gross receipts from places of entertainment or amusements.

In addition to the State Sales Tax, local sales taxes are also due, and these rates vary. The State of Alabama administers over 200 different city and county sales taxes; however, we do not administer all county or city sales taxes. Therefore, be advised to contact all counties and municipalities in which you do business in order to determine if you should register with them to collect their local tax. The local tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month for the previous month’s sales. However, a taxpayer may elect to file and pay state-administered local sales tax quarterly when the total state sales tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. The election to file and pay quarterly shall be made in writing to the Department no later than February 20 of each year. Also, if a taxpayer’s total state sales tax liability during the preceding calendar year is $10 or less, the taxpayer may file local sales tax on a calendar year basis. The discount for local sales tax is the same as for State sales tax.

Note: If paying via EFT, the EFT payment information must be transmitted by 4:00 p.m. (Central Standard Time) on or before the due date, to be considered timely paid.

ONE SPOT

This program provides a single point of filing for all state-administered local sales, use, rental and lodgings taxes, as well as, non-state administered sales, use and rental taxes through MAT.  Effective October 2016, non-state administered local lodgings tax will be added to the tax types available to be filed in MAT/ONE SPOT.

E-Filing Payment & Assistance

Go to MAT