If your limited liability company (LLC) sells physical products or certain types of services, you will need to collect and pay sales tax. In Alabama, the first step is visiting the revenue department website and registering for sales tax in order to acquire a seller’s permit, or sales tax permit.
What Products and Services Are Subject to Sales Tax in Alabama?
All retail sales of tangible goods are subject to sales tax in Alabama. Services are rarely subject to sales tax. Prescription drugs and gasoline are exempt from sales tax in Alabama.
Alabama Sales Tax Rate
The sales tax rate in Alabama is 4%.
Five states have no sales tax. Colorado has the lowest sales tax at 2.9%, while California has the highest rate at 7.25%.
How to Register for Alabama Sales Tax
In Alabama, acquire a seller’s permit by following the Department of Revenue’s detailed instructions for registration:
- Go to the My Alabama Taxes website.
- Register for an account.
- Fill out the business tax registration form.
Use our Sales Tax Calculator to calculate taxes and total purchase amount.
In Alabama, and across the country, collecting sales tax is a must if you want to avoid potentially heavy fines and even closure. It’s crucial that you follow your state’s laws, and you might consider consulting with an accountant or tax attorney to make sure you’re in full compliance.