Alabama Sales Tax Application Common Questions & Support
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.