Alabama's statewide sales tax is 4 percent
Alabama charges a 4 percent state sales tax on most goods and some services. This is the base rate that applies everywhere in the state. However, your actual tax at checkout is almost always higher because counties and cities add their own local sales taxes on top of the state rate.
The total tax you pay depends on where you make the purchase. A 4 percent item in one county might be taxed at 7 or 8 percent in another. This matters most for large purchases — a $1,000 appliance will cost you $40 more in state tax alone, but the local portion could add another $30 to $80 depending on your location.
Key Takeaways
- Alabama's state sales tax is 4 percent, but your total tax rate includes county and city additions that range from 1 to 5 percent more.
- Most goods are taxed, but groceries, prescription medications, and medical devices are exempt from all Alabama sales tax.
- Services like haircuts, repairs, and professional fees are generally not taxed in Alabama, though some specific services have exceptions.
- Your city or county tax office can tell you the exact combined rate for your address, or you can check the Alabama Department of Revenue website.
How local taxes stack on top of the state rate
Counties in Alabama add their own sales tax, ranging from 1 to 5 percent depending on the county. Cities then add an additional local tax on top of that. This means the combined rate you actually pay can be anywhere from 5 percent to as high as 10 percent or more in some locations.
For example, if you live in Jefferson County (which includes Birmingham), the county adds 2 percent to the state's 4 percent. The city of Birmingham then adds another 2 percent, bringing your total to 8 percent. In a smaller county with lower local rates, you might pay only 5 or 6 percent total.
The only way to know your exact rate is to check your specific city and county. The Alabama Department of Revenue publishes a complete list of all county and city rates on its website, organized by location. You can also call your city or county tax assessor's office and they will tell you the combined rate for your address.
What is and is not taxed in Alabama
Food and medicine are the biggest exemptions. Groceries — bread, milk, vegetables, meat, and other unprepared food — are not taxed. Prescription medications are also exempt. Over-the-counter medicines like aspirin or cold medicine are taxed, but prescription drugs are not.
Medical devices and equipment used to treat a condition are generally exempt as well. This includes items like wheelchairs, hearing aids, and diabetic testing supplies. Clothing is taxed in Alabama, including shoes and accessories.
Services are usually not taxed. A haircut, car repair, plumbing work, or accounting services do not have sales tax added. However, some services have exceptions — for instance, certain telecommunications services and hotel stays are taxed. Rental of tangible property (like a car or equipment) is often taxed, but the rules vary by item type.
Tax rates by county
Alabama has 67 counties, and each sets its own rate. The state rate is always 4 percent, but counties range from adding 1 percent to 5 percent. Cities then add their own rate on top of the county rate.
| County Example | County Rate | State Rate | Typical City Rate | Combined Range |
|---|---|---|---|---|
| Jefferson (Birmingham area) | 2% | 4% | 1–2% | 7–8% |
| Madison (Huntsville area) | 2% | 4% | 1–2% | 7–8% |
| Mobile (Mobile area) | 2% | 4% | 2% | 8% |
| Calhoun (Anniston area) | 2% | 4% | 1–2% | 7–8% |
| Rural counties (example) | 1–3% | 4% | 0–1% | 5–8% |
The combined rate you pay is the sum of all three: state (4%) + county (1–5%) + city (0–2% typically). To find the exact rate for your location, use the Alabama Department of Revenue's online rate finder or contact your city or county tax office directly.
Online purchases and out-of-state sellers
Alabama requires out-of-state online sellers to collect and send sales tax to the state if they have a physical presence in Alabama or if they meet certain sales thresholds. Most large online retailers now collect Alabama sales tax at checkout, and the rate applied is based on the shipping address you provide.
If you order something online and it ships to an Alabama address, the seller should charge you the combined state and local sales tax for that address. If the seller does not collect tax, you are technically responsible for reporting and paying the tax yourself to Alabama, though this is rarely enforced for individual purchases.
Frequently Asked Questions
Is clothing taxed in Alabama?
Yes, clothing is taxed in Alabama at the full combined rate. This includes shoes, accessories, and all apparel. Groceries and prescription medications are the main exemptions, but regular retail items like clothes are taxed.
Do I pay sales tax on restaurant meals?
Yes, restaurant meals and prepared food are taxed at the full combined rate. This includes takeout and delivery orders. Unprepared groceries you buy at a store are not taxed, but anything prepared for immediate consumption is.
How do I find the exact sales tax rate for my city?
The Alabama Department of Revenue website has a rate lookup tool where you enter your city and county. You can also call your city or county tax assessor's office and they will give you the combined rate for your specific address in seconds.
Are there any statewide sales tax holidays in Alabama?
Alabama does not have a permanent statewide sales tax holiday. However, the state legislature occasionally passes temporary tax-free periods for specific items like school supplies or energy-efficient appliances. Check the Alabama Department of Revenue website for any current or upcoming holidays.
Do I owe sales tax on used items I buy from individuals?
No, private sales between individuals are not subject to Alabama sales tax. Sales tax applies to retail transactions. If you buy a used car, furniture, or other item from a private person, there is no sales tax. However, if you buy from a dealer or business, tax applies.