Key figures
Alabama receivables
2026, with sources
State, local and self-administered
Alabama’s state sales tax sits under a dense layer of local taxes. The Department of Revenue administers more than 200 city and county sales taxes and offers ONE SPOT, a single electronic filing point for state-administered and certain other local taxes, but some localities administer their own and require separate registration. The Department’s own advice is to contact every county and municipality where you do business.
Returns are due by the 20th of the month after the period. Monthly is the default; quarterly, semiannual or annual filing is available for small prior-year liabilities.
Remote sellers: $250,000 and a flat 8%
Alabama’s economic nexus threshold is high: $250,000 of retail sales into the state in the previous calendar year. An eligible remote seller, one with no Alabama physical presence, can join the Simplified Sellers Use Tax program and collect a flat 8% on every Alabama sale, filing monthly by the 20th and keeping a 2% discount for timely payment. The 8% satisfies the buyer’s state and local use tax as well.
Example: an out-of-state company selling $300,000 of taxable goods into Alabama in 2025 must collect from 2026. Under SSUT it charges 8% to every Alabama customer regardless of city, instead of registering with dozens of localities.
SaaS
Alabama has no published rule on SaaS. Its software rule taxes software regardless of how it is transmitted, and the Alabama Supreme Court held in 2019 that all software is tangible personal property, but neither addresses access to software the customer never receives. That leaves SaaS sellers to make and document a position.
Deadlines
- 20th of the month after the periodSales tax return (monthly by default)
- 20th of each monthSSUT return for remote sellers
The federal baseline
This page covers what Alabama adds. The federal rules underneath it apply here too.
Common questions
How do we collect Alabama sales tax?
It depends on where you are. A seller with no physical presence in Alabama that passes $250,000 of retail sales into the state can join the Simplified Sellers Use Tax program, collect a flat 8% and file one monthly return with the Department of Revenue. A seller with an Alabama location registers for sales tax with the Department and also with each self-administered city or county where it sells.
Do we charge Alabama sales tax on SaaS?
No one can say with certainty. Alabama treats software as tangible personal property and taxes it regardless of how it is transmitted, but there is no rule or published guidance on software accessed remotely without a copy being transferred. Some companies collect, some do not, and some ask the Department for a ruling.
Receivables next door
- FLFlorida receivablesFlorida’s rate is 6% plus county surtax, remote sellers register after $100,000 of taxable sales, and SaaS delivered electronically has generally been ruled not taxable.
- GAGeorgia receivablesGeorgia’s rate is 4% plus local option taxes, remote sellers register at $100,000 or 200 sales, and electronically delivered software and SaaS are generally not taxable.
- MSMississippi receivablesMississippi charges 7% plus some local taxes, requires remote sellers to register above $250,000 in 12 months, and since July 2023 does not tax software hosted outside the state and accessed over the internet.
- TNTennessee receivablesTennessee charges 7% plus local tax, taxes remotely accessed software, and requires remote sellers to register once retail sales into the state exceed $100,000 over 12 months.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
More of the Alabama guide
- AccountingAccounting and state tax in AlabamaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in AlabamaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in AlabamaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in AlabamaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in AlabamaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.