Alabama taxes retail sales at the state level and again at the city and county level, and the state itself uses more than one rate. Groceries and cars are taxed at lower state rates than most other goods.
This guide sets out the state rates, the local add-ons, how the food rate changed, what ALDOR says is exempt, use tax and the Simplified Sellers Use Tax, and the 2026 back-to-school holiday, using the Alabama Department of Revenue's own pages read on 2 November 2026.
Alabama has no single sales tax rate. The Alabama Department of Revenue (ALDOR) publishes a state rate list, and the rate depends on what is sold. The rate list gives 4% as the general state rate, and ALDOR's guide for vehicle dealers says the same (4 percent on items other than vehicles). The other rates are below. The list is headed "Sales, Use, Rental and Lodgings Tax Rates" and shows sales and use tax together.
| What is sold | State rate | Source note |
|---|---|---|
| General merchandise | 4% | ALDOR state rate list ("General") |
| Food and groceries | 2% | Effective 1 September 2025 (3% from 1 September 2023 to 31 August 2025) |
| Automotive vehicles | 2% | State portion only; local tax is separate |
| Farm machinery | 1.5% | ALDOR state rate list |
| Vending machines, food products | 3% | ALDOR state rate list |
| Vending machines, all other | 4% | ALDOR state rate list |
| Automotive rental or leasing | 1.5% | State rental tax; separate from sales tax |
City and county taxes come on top of every state rate in this table. The sections below cover what ALDOR says about local tax, food, vehicles and use tax.
ALDOR states: "In addition to the state sales tax, local sales taxes are also due, and these rates vary." It adds that the state administers over 200 different city and county sales taxes but does not administer all of them, so the combined rate you pay depends on where the sale is made and which local governments tax it.
We do not print a table of local rates because they differ by location and change. ALDOR publishes a State Administered Local Tax Rate Schedule and monthly rate reports on its Sales and Use Tax Rates page; use those to find the rate for a specific address. If the amount matters, confirm with the local government.
ALDOR's notice dated 2 July 2025 says that under Act 2025-305 the state sales and use tax rate on food was reduced from 3 percent to 2 percent on 1 September 2025. The state rate list shows 2% for food from that date and 3% for 1 September 2023 to 31 August 2025.
Separately, Act 2026-604 suspended the state portion of the sales and use taxes on food from 1 May 2026 through 30 June 2026. ALDOR's notice says city and county food taxes were not affected. That period has ended, and the rate list we read on 2 November 2026 shows the 2% food rate with no end date. For the suspension, ALDOR defined food using the federal SNAP rules: food or food products for home consumption, except alcoholic beverages, tobacco, and hot foods or hot food products ready for immediate consumption.
Local food taxes continue under each locality's own rate, so a grocery receipt can still show city and county tax at the 2% state rate.
ALDOR's sales tax page lists some of the more common exempt items: prescription drugs and gasoline and motor oil, among others. It also says labor to repair or install property is exempt as long as it is billed as a separate item on the customer's invoice, and that cigarettes and beer are not exempt from sales or use tax.
This is ALDOR's summary of common cases, not a full list; the department's administrative rules and the Code of Alabama govern. If your item is not named here, check with ALDOR before assuming it is exempt or taxable.
ALDOR's automotive guide (February 2025 edition) says the state sales tax on automotive vehicles is 2 percent of the gross proceeds of the sale. When a used vehicle is taken in trade as a credit or partial payment, the sales tax is levied on the net difference. Automotive rental or leasing carries a state rental tax of 1.5 percent. Local taxes may also apply.
Our separate guide covers titling and county costs: see Alabama Vehicle Sales Tax.
Use tax covers what sales tax misses. ALDOR says the consumers use tax is imposed on tangible personal property brought into Alabama for storage, use or consumption in the state when the seller did not collect seller's use tax on the sale. The local consumers use tax return is due on or before the 20th day of the month following the month of purchase, and if a local city or county sales or use tax is paid under a requirement of law, no other additional local tax is due for the later use in another city or county.
Out-of-state sellers that choose to join the Simplified Sellers Use Tax (SSUT) program collect a flat 8% on sales into Alabama. ALDOR says the flat 8% applies regardless of the locality into which the product is shipped, that the program applies only to sellers who volunteer, and that collection of the SSUT relieves the seller and the purchaser from any additional state and local sales or use taxes on the transaction.
ALDOR says sales tax is due monthly, with returns and remittances filed on or before the 20th day of the month for the previous month's sales. The same page says a seller can request quarterly filing with a tax liability of less than $2,400 for the preceding calendar year (with lower thresholds for semi-annual and annual filing) and says changes to filing status can only be requested each year before 20 February.
Alabama holds an annual back-to-school sales tax holiday. ALDOR's fact sheet says the 2026 event, the 21st annual, ran from 12:01 a.m. Friday 17 July to midnight Sunday 19 July, and that "Local sales tax may still apply." ALDOR's notice says the dollar amounts of covered items for this holiday and the severe weather preparedness holiday are adjusted by the Consumer Price Index for calendar year 2026, so the caps below are 2026 figures. The notice says ALDOR will repeat the adjustment every five calendar years, so the 2026 caps may carry forward until the next adjustment; check ALDOR for later holidays.
| Item (2026 holiday) | Cap |
|---|---|
| Clothing | $156 or less per article |
| Books (noncommercial) | $47 or less per book |
| School supplies, art supplies, instructional material | $78 or less per item |
| Computers and software | A separate cap applies to a single computer purchase; see the ALDOR fact sheet |
This table is from the 2026 fact sheet. Check ALDOR for the next holiday's dates and caps.
These examples are our own arithmetic on the state rates ALDOR lists, with no local tax included. Add the local city and county tax for your location to get the real total.
| Purchase | Taxable amount | State rate | State tax |
|---|---|---|---|
| Groceries | $200 | 2% | $4.00 |
| General merchandise | $1,000 | 4% | $40.00 |
| Vehicle, $30,000 price less $10,000 trade-in | $20,000 | 2% | $400.00 |
| Farm machinery | $10,000 | 1.5% | $150.00 |
| Online purchase from an SSUT seller | $100 | 8% flat | $8.00 |
The SSUT row is the flat rate that stands in for the state and local sales and use taxes on that transaction, not an addition to them. These tables are our arithmetic, not an ALDOR calculation; the department's returns and your receipt govern.