Alabama State Sales Tax Online Registration

Any business that sells goods or taxable services within the state of Alabama to customers located in Alabama is required to collect sales tax from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in Alabama must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.

Do you need to get a Sales Tax certificate in Alabama State?

You may need a Sales Tax Certificate if any of the following apply your business:

  • You have a physical office or place you conduct
  • You sell or ship products to a buyer in Alabama
  • You have a distribution location such as a storage area or warehouse space
  • You have employees physically present in Alabama (including independent contractors, Sales persons, representatives, or agents)
  • Your business has remote entity presence (Remote sellers making sales into the state of Alabama)
  • Your business has economic presence (businesses who make over $250,000 in sales annually)

What constitutes taxable services in Alabama?

The majority of service businesses are not taxable in Alabama. The exceptions would be service businesses that manufacture tangible parts or products and sell them at retail. A good example of this would be a HVAC company that services and sells air conditioning units and their parts.

Why do I need a Sales Tax Certificate to purchase wholesale items for Resale in the State of Alabama?

As a wholesale company conducting business in the state of Alabama, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.

Do you have to collect Sales Taxes for shipping charges?

If you list shipping charges separately then you do not have to collect sales tax, but if you lump them in with the price of the merchandise sold then you would have to.

Is there sales tax on drop shipments in the state of Alabama?

A drop shipment is where a seller (most times out of state) sells a product which is then delivered to a consumer by a third-party shipper. In most instances, drop shipments in Alabama are required to have sales tax added

Are there any exemptions to taxable items sold?

Raw materials used in manufacturing and custom downloadable software are tax exempt

Register for an Alabama sales/use tax number

Alabama state, county, city, & municipal tax rate table

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