Alabama Sales Tax

You do need to know the purchase ZIP code and purchase amount in order to get an accurate figure. For an example we will use the amount of $100 and see what the ranges could be from the highest area to the lowest.

In Tuskegee, AL with the highest sales tax of 11.5% would mean that your $100 purchase would incur a $11.5 sales tax, taking the total amount to $111.5.

Whereas in Warrior, Al the sales tax is only 7% and a $100 purchase would equate to $7 tax, taking the total to $107.

The sales tax calculator makes it as easy as it can be to find out what sort of sales tax you will be charged by simply adding the amount and the ZIP code. Though there might be some purchases that are exempt from sales taxes or have some special leniency which do need to be taken into consideration.

Why do I need to collect sales tax in Alabama?

You will need to collect sales tax if you have any sort of nexus there, and what this means is that if you have assets that are physical or economic then you need to do this.

Physical meaning having a tangible activity or some sort of presence in any of the states of Alabama, economic nexus is simply passing the states’ economic threshold for total revenue, or the maximum number of transactions that can occur in the period of time within the state.

Two easy ways to see if you have either a physical or economic nexus in any of the counties is the following:
Physical:

• Tangible personal property
• Business assets or property
• Own, renting properties
• Made more than $500,000 in a service or content delivery in the state

Economic:

• Made more than $100,000 in sales annually
• More than 200 transactions in the last calendar year

How do I get a sales tax permit?

The main way to go about this is to register online at the Alabama Business Gateway. Follow the steps that are presented to you and ensure that you have the following to hand to use as information:

• Business identification information
• Business entity
• Location/s that you will be conducting this from
• Date you will start collecting Alabama sales tax from a business/property
• NAICS Code (North American Industry Classification System.)

What is the best way to file sales taxes?

Before you think of doing anything else there are three things that we recommend that you do in order to make this process as easy and smooth as possible.

First of all, find out how much tax you owe (remember the sales tax calculator we mentioned before) so that you know how much you need to pay the state at the end. Second is get onto the Alabama Department Of Taxation ready to submit them, and third have the money ready so you can make the payment straight away.

There are two main options as well to filing and paying your Alabama sales tax, these are:

• Filing online. This is where merchants are required to file all of their sales taxes through the department of taxation in the state of Alabama, you can also pay your taxes on this platform, so it is one to keep close to you for future reference.
• Filing by mail. Simply fill out the form UST-1, but this is not the recommended way of filing your taxes due to the possibilities of them getting lost in the post and then it could mean that you are subject to late fees if they are not filed within the allotted time.

We hope this document was able to allow you to feel more confident when it comes to sales tax in the state of Alabama depending on where you operate out of.