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.
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.
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.
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.
Raw materials used in manufacturing and custom downloadable software are tax exempt.
( if any apply to your business )
You have a physical office or place you conduct in the State of Alabama
You sell or ship products to a buyer in the State of Alabama
You have a distribution location such as a storage area or warehouse space in the State of Alabama
You have employees physically present in the State of Alabama(including independent contractors, Sales persons, representatives, or agents)
Your business has remote entity presence (Remote sellers making sales in the State of Alabama)
Your business has economic presence (businesses who make over $250,000 in sales annually) in the State of Alabama