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State Sales and Use Tax Rates

  • State Sales and Use Tax Rates

Contractors Gross Receipts Tax Rate (40-23-50(a))

5% of gross receipts derived from performance of contracts to construct, reconstruct or build any public highway, road, bridge or street.

Dry Cleaning Environmental Response Trust Fund Registration Fee

Type of BusinessFee
Owner/Operator of an Existing Dry Cleaning Facility Electing to be Covered (22-30D-6(a))2% of the gross receipts earned in Alabama during the prior calendar year, not to exceed $25,000 per year.
New Owner/Operator Acquiring an Existing Dry Cleaning Facility after May 24, 2000 Electing to be Covered (22-30D-6(b))2% of the gross receipts earned in Alabama by the prior owner/operator during the prior calendar year less the amount paid by prior owner/operator, not to exceed $25,000.
New Owner/Operator Establishing a New Dry Cleaning Facility after May 24, 2000 Electing to be Covered (22-30D-6(c))One-time registration fee of $5,000 for the first year of operation; for the second year of operation, the greater of $5,000 or 2% of the gross receipts earned for prior calendar year, not to exceed $25,000. For each year thereafter, see “Owner/Operator of an Existing Dry Cleaning Facility” above.
Wholesale Distributors of Dry Cleaning Agents (22-30D-6(d))$5,000 per year
Owner of Abandoned Dry Cleaning Facility or Impacted Third Party (22-30D-6(m))$5,000 per year, per site

Health Care

Alabama Nursing Facilities Privilege Tax Rates (40-26B-21(a) & (b))

  • Annual rate of $1,200.00 for each bed in the facility (for periods prior to June 2004.)
  • Annual rate of $1,899.96 for each bed in the facility (Effective June 1, 2004 per Act 2004-532. For June 2004 – August 2010 returns.)
  • Annual rate of $2,963.04 for each bed in the facility (Effective September 1, 2010 per Act 2010-520. Beginning with the September 2010 return.)
  • Annual rate of $3,503.04 for each bed in the facility (Effective September 1, 2011 per Act 2011-614. Beginning with the September 2011 return.)
  • Annual rate of $4,028.04 for each bed in the facility (Effective September 1, 2012 per Act 2012-536. Beginning with the September 2012 return.)
  • Annual rate of $4,429.32 for each bed in the facility (Effective October 1, 2015 per Act 2015-536. Beginning with the October 2015 return.)
  • Annual rate of $4,756.80 for each bed in the facility (Effective September 1, 2020 per Act 2020-147. Beginning with the September 2020 return.)

Hospital Assessment For Medicaid Tax Rates (40-26B-72 & 40-2A7(a)(5))

Effective DateTax Rate
October 1, 20196.0% of the hospital’s net patient revenue. Privately operated hospitals in the state of Alabama that are funded through the Alabama Medicaid program are taxed according to their net patient revenue. The assessment is a cost of doing business as a privately operated hospital in the state of Alabama. Assessment amounts are to be paid in equal quarterly installments by the 15th working day of each quarter.
October 1, 2018 – September 20195.75% of the hospital’s net patient revenue. Privately operated hospitals in the state of Alabama that are funded through the Alabama Medicaid program are taxed according to their net patient revenue. The assessment is a cost of doing business as a privately operated hospital in the state of Alabama. Assessment amounts are to be paid in equal quarterly installments by the 15th working day of each quarter.
October 1, 2014 – September 20185.5% of the hospital’s net patient revenue. Privately operated hospitals in the state of Alabama that are funded through the Alabama Medicaid program are taxed according to their net patient revenue. The assessment is a cost of doing business as a privately operated hospital in the state of Alabama. Assessment amounts are to be paid in equal quarterly installments by the 10th working day of each quarter.

Pharmaceutical Provider Tax Rates (40-26B-2)

Effective DateTax Rate
June 17, 2016 – Present$0.10 cents for each prescription filled or refilled for a citizen of Alabama (40-26B-2).
September 1, 2015 – June 16, 2016$0.25 cents (Effective September 1, 2015 per Act 2015-537, a supplemental tax was levied in addition to the $0.10 cents plus already imposed for each prescription filled or refilled for a citizen of Alabama. The total $0.25 cent rate was effective for prescriptions filled between September 1, 2015 and June 16, 2016.)
July 1, 2002 – August 31, 2015$0.10

Sales, Use, Rental and Lodgings Tax Rates

Sales and Use Tax Rates

  • General (40-23-2(1) & 40-23-61(a)):  4%
  • Automotive (40-23-2(4) & 40-23-61(c)):  2%
  • Manufacturing (40-23-2(3) & 40-23-61(b)):  1.5%
  • Farm Machinery (40-23-37 & 40-23-63):  1.5%
  • Vending through Vending Machines:  3%
  • Vending (not machines) Sales & Use (40-23-2(5)):  4%
  • Amusement Sales & Use (40-23-2(2)):  4%

Simplified Sellers Use Tax Rate

  • (40-23-193(a)):  8%

Rental or Leasing Tax Rates

  • General/Other (40-12-222):  4%
  • Automotive (40-12-222):  1.5%
  • Linens/Garments (40-12-222):  2%

Lodgings Tax Rates

  • Alabama Mountain Lakes Area (40-26-1(a)):  5%   Includes the following counties: Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan and Winston.
  • All other Alabama counties (40-26-1(a)):  4%

Click here for State Lodgings Tax Codes

Telecommunications

Mobile Telecommunications Service Tax Rates (40-21-121(a) & (Act 2001-1090))

6% of gross sales or gross receipts from monthly charges from the furnishing of mobile telecommunications service and mobile radio communication services.

Prepaid Wireless 9-1-1 Charge (Act 2012-293)

Effective January 1, 2019 –  $1.86 per retail transaction

Utilities

Hydroelectric Kilowatt Hour Tax Rates (40-21-56)

2/5 mill on each kilowatt hour of hydroelectric power manufactured and sold

2.2% Utility License Tax Rates (40-21-53(a))

2.2% of each dollar of gross receipts from each entity operating a public utility (hydroelectric, railroads express companies, telephone and telegraph companies excepted)

Utility Gross Receipts Tax & Utility Service Use Tax Rates

Electricity, Domestic Water, and Natural Gas Services (40-21-82(a) & 40-21-102(a))

Monthly Gross Sales or Gross ReceiptsTax
Not over $40,0004% of such gross sales or gross receipts
Over $40,000, but not over $60,000$1,600 plus 3% of excess over $40,000
Over $60,000$2,200 plus 2% of excess over $60,000

Telephone and Telegraph Services Tax Rates (40-21-82(b) & 40-21-102(b)) (Act #2001-1090)

6% of all gross sales or gross receipts

Interest Rates by Calendar Quarter

Formula example: 3% ÷ 365 = daily rate x number of days late x tax = interest due

Year1st Qtr2nd Qtr3rd Qtr4th Qtr
20223%4%  
20213%3% 3%3%
20205%5%3%3%
20196%6%5%5%
20184%5%5%5%
20174%4%4% 4%
20163%4%4%4%
20153%3%3%3%
20143%3%3%3%
20133%3%3%3%
20123%3%3%3%
20113%4%4%3%
20104%4%4%4%
20095%4%4%4%
20087%6%5%6%
20078%8%8%8%
20067%7%8%8%
20055%6%6%7%
20044%5%4%5%
20035%5%5%4%
20026%6%6%6%
20019%8%7%7%
20008%9%9%9%
19997%8%8%8%
19989%8%8%8%
19979%9%9%9%
19969%8%9%9%
19959%10%9%9%
19947%7%8%9%
19937%7%7%7%
19929%8%8%7%

According to Section 40-1-44, Code of Alabama 1975, the Alabama Department of Revenue will calculate interest on underpayments and overpayments (where applicable) at the same annual rate, with the exception of land sold by the state for taxes, which shall be calculated at 12% as provided for under Section 40-5-9.