State sales tax rate4%
* While the base rate applies statewide, it’s only a starting point for calculating sales tax in Alabama. For an accurate tax rate for each jurisdiction, add other applicable local rates on top of the base rate.
Alabama sales tax basics
The Alabama (AL) state sales tax rate is currently 4%. Depending on local municipalities, the total tax rate can be as high as 11%.
Sales tax is a tax paid to a governing body (state or local) for the sale of certain goods and services. First enacted in the United States in 1921, sales tax dates back to ancient Egyptian times where paintings depict the collection of tax on commodities. Alabama first adopted a general state sales tax in 1936. Since that time, the rate has risen to 4%.
As a business owner selling taxable goods or services, you act as an agent of the state of Alabama by collecting sales tax from purchasers and passing it along to the Department of Revenue. This is an important point worth emphasizing. Any sales tax collected from residents belongs to the Department of Revenue. As a business owner, it is your responsibility to manange the sales tax you collect to remain in compliance with state laws and avoid penalties and interest.
Businesses may register for an Alabama Sales Tax License online by visiting My Alabama Taxes and following the instructions provided. The Alabama Department of Revenue recommends all new businesses register online. It’s fast, free, and more reliable than other options.
The Alabama Department of Revenue recommends all taxpayers filing sales tax file online. It’s faster, more reliable, and free.
To file your return online, visit My Alabama Taxes (MAT) and follow the instructions provided.
NOTE: Alabama Department of Revenue Rule 810-1-6-.12 mandates state sales tax be filed electronically.
Based on the total sales tax collected, businesses are assigned a filing frequency. Of course, the government will always accept payments sooner than required so filers may accelerate payments if they choose.
Extended Due Dates should be used in the event of a Assigned Due Date falling on a weekend or federal holiday.
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