State of Alabama Sales Tax The 2016 Alabama State Sales Tax

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What is the 2016 Alabama Sales Tax Rate?

Alabama Sales Tax Rate

4.00%

2016 Alabama state sales tax
Exact tax amount may vary for different items

The Alabama state sales tax rate is 4%, and the average AL sales tax after local surtaxes is 8.91%.

  • Prescription Drugs are exempt from the Alabama sales tax
  • Counties and cities can charge an additional local sales tax of up to 7%, for a maximum possible combined sales tax of 11%
  • Alabama has 765 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
  • Alabama has a lower state sales tax than 94.2% of states

Alabama is one of the few states that does not exempt groceries and food from the state sales tax. Cities and counties may enact their own sales tax on top of Alabama's - for example, Montgomery has a city sales tax of 3.5% and Birmingham has a local sales tax of 4%.

If you are a Alabama business owner, you can learn more about how to collect and file your Alabama sales tax return at the 2016 Alabama Sales Tax Handbook .

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Alabama Sales Tax Exemptions

Alabama doesn't collect sales tax on purchases of most prescription drugs. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.

Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Unlike many states, Alabama treats both candy and soda as groceries for sales tax purposes. Other items including gasoline, alcohol, and cigarettes are subject to various Alabama excise taxes in addition to the sales tax.

Alabama has six sales tax holidays, during which certain items can be purchased sales-tax free. For more details, see the Alabama sales tax holiday calendar.

In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. The AL sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Alabama's sales tax rates for commonly exempted items are as follows:

Groceries: 4% Clothing: 4% Prepared Food: 4% Prescription Drugs: EXEMPT Non-Prescription Drugs: 4%
Alabama sales tax for a restaurant meal
$100 Restaurant Dinner
Alabama sales tax for groceries
$100 of groceries
Alabama sales tax for clothing
$100 in clothes
Alabama sales tax for general consumer products
$100 of consumer products
$4.00 sales tax
$104.00 total
$4.00 sales tax
$104.00 total
$4.00 sales tax
$104.00 total
$4.00 sales tax
$104.00 total

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Alabama Sales Tax Exemption Certificate

Unlike a Value Added Tax (VAT), the Alabama sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Alabama Sales Tax Exemption Form to buy these goods tax-free.

Companies or individuals who wish to make a qualifying purchase tax-free must have a Alabama state sales tax exemption certificate, which can be obtained from the Alabama Department of Revenue . On making an exempt purchase, Exemption Certificate holders may submit a completed Alabama Sales Tax Exemption Form to the vendor instead of paying sales tax.

Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Alabama sales tax code) can be downloaded from the Alabama Department of Revenue here .

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Alabama Sales Tax Calculator

 Sales Tax Calculator
Purchase Details:
$ in zip code Enter the zip code where the purchase was made for local sales tax

Whenever you make a purchase at a licensed Alabama retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Alabama sales tax calculator.

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Alabama Use Tax [View Main Article]

If you buy goods and are not charged the Alabama Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 4% sales tax (less any foreign sales tax paid) for these items yourself as the Alabama Use Tax.

Your are expected to voluntarily list your liable purchases on a Alabama Use Tax Return, which should be attached with payment to your Alabama Income Tax Return. Historically, compliance rates with with the Alabama Use Tax have been low.

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Alabama Local Sales Taxes

Alabama allows counties and cities to collect a maximum local sales tax of 3.00% on all non-exempt purchases within their jurisdiction. The local sales tax is collected in addition to the Alabama sales tax of 4%, so the actual sales tax you pay on purchases in Alabama may vary between 4% and 7.000% depending on which county or city the sale is made in.

You can find local sales tax rates on our list of Alabama local sales taxes by county, city, and zip code, or you can lookup your local sales tax rates with our free Alabama sales tax lookup tool. If you need to download Alabama local sales tax rates, visit the Alabama sales tax database download page.


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