Alabama’s state sales tax rate is 4.00%, but local jurisdictions can add on county and municipal taxes that more than double the average. Overlapping jurisdictions also mean that sales tax rates in Alabama can vary by street address, even within the same ZIP code. Below, we’ll explain how Alabama’s sales tax works, what the combined rates are in the largest cities, and what businesses need to know about collection.

Highlights

• Alabama’s baseline sales tax rate is 4.00%, but local add-ons push the average combined rate to over 9.00%.

• Two annual sales tax holidays in Alabama reduce sales tax on specific categories of goods.

• Remote sellers with more than $250,000 in sales into Alabama need to collect and remit sales tax.

What is the Alabama sales tax rate?

Alabama’s state sales tax rate is 4.00%, which is among the lowest base rates in the US. But with local taxes added on top, the average combined rate throughout the state rises to 9.46%. That means Alabama has, on average, one of the highest combined sales tax rates in the US. There are hundreds of local tax jurisdictions across the state that collect an average local sales tax of 5.46%.

A few categories receive different tax treatment:

• Groceries: The state reduced its food tax to 2.00% in 2025, but local rates can still apply on top.

• Vehicles: The net trade difference of new or used automobiles, truck trailers, semitrailers, and house trailers is taxed at a reduced state rate of 2.00%.

• Digital goods and services: Downloaded software is considered tangible property and subject to sales tax in Alabama, but software-as-a-service (SaaS) is generally not taxable.

When do businesses need to collect Alabama sales tax?

Any business with a physical presence in Alabama must collect and remit applicable sales tax. So do remote companies that exceed the threshold for economic nexus, which is retail $250,000 in annual retail sales to Alabama customers. That threshold doesn’t include wholesale or resale revenues.

There are some ways to simplify your sales tax burden in Alabama. Third-party marketplaces such as eBay and Etsy collect and remit Alabama sales tax for you. And eligible out-of-state sellers can opt in to the Simplified Sellers Use Tax (SSUT), which replaces local and state sales tax with a single flat rate of 8.00%.

What local sales taxes apply in Alabama?

County and municipal governments often add their own sales taxes to Alabama’s state sales tax. Some localities’ taxes are administered by the state, which means you can file those taxes in a single return, but others handle their own collection independently.

Counties can adjust local sales taxes for schools, but not for other purposes. Cities can set their own local sales tax rates without requesting specific legislative permission, which means rates there can shift quickly. The Alabama Department of Revenue publishes updated files for sales tax rates monthly.

Two sales tax holidays apply statewide each year:

• Back-to-school: The sale begins at 12:01 a.m. on the third Friday in July and ends at midnight Sunday in localities that opt in. It covers clothing, school supplies, and computers up to specified price thresholds.

• Severe weather preparedness: This sale runs the last full weekend in February, from 12:01 a.m. on Friday to midnight on Sunday. It covers portable generators, weather radios, and other emergency equipment.

What is Alabama’s sales tax rate range in 2026?

Alabama’s combined rates range from 4.00%–12.50%. As of 2026, 375 out of 596 cities in Alabama levy a city sales tax. Rate changes at the local level can happen on independent schedules, which is why the Department of Revenue’s monthly rate file is worth bookmarking. Tax tools like Stripe Tax track changes to local sales tax rates for you so you don’t have to worry that your checkout is calculating tax based on outdated rates.

What are Alabama’s sales tax rates by city?

The following chart shows the minimum rate for combined sales tax for the largest cities in Alabama, accounting for state, county, and city add-ons. Actual rates can vary within city limits depending on special districts so treat these as a floor rather than a guaranteed figure for every address.

Rates are current as of early 2026 but can change if municipalities update their ordinances.

What are Alabama’s sales tax rates by county?

Below are the county sales tax rates for select counties in Alabama. Remember that cities within a county might add more on top so the combined rates in the city table above run higher than what you see here.

How do you calculate Alabama’s sales tax?

To calculate Alabama sales tax, multiply the taxable sale amount by the combined rate (state plus city and county) at the delivery address. For example, on a $200 purchase in Birmingham at a 10.00% combined sales tax rate, you would collect $20 in tax.

Rates can vary within a single ZIP code, so a street-level address is necessary to calculate the tax accurately. Stripe’s sales tax calculator lets you look up the current combined rate for any Alabama address.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, value-added tax (VAT), and goods and services tax (GST) on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.