Alabama is known as the "Yellowhammer State", after the state bird. During the Civil War Alabama soldiers were known as "Yellowhammers", commonly pronounced, "Yallerhammers" because of the yellow trim sewn on their gray confederate uniforms. Alabama is also known as the "Heart of Dixie". Prior to the Civil War Alabama was an agricultural state, and still today Alabama's agricultural outputs include poultry, eggs, cattle, farm-raised-fish, potting plants, peanuts, cotton, corn, sorghum, soybeans, vegetables, milk, and peaches. Although known as "The Cotton State," Alabama actually ranks ninth in cotton production within the United States.
Alabama is the 30th-most extensive and the 23rd-most populous state with 4.9-million residents, each paying up to 10% total (state and local) sales tax (based on statutory authority). The capital of Alabama is Montgomery. The largest city by population is Birmingham. Huntsville, “the rocket capital’ is home to NASA’s George C. Marshall Space Flight Center who designed the Saturn V rocket that took man to the moon. Today Alabama is home to several major automakers including Hyundai, Honda, Mercedes-Benz, and Toyota. In the near future, Alabama will be home to Airbus which will build their A320 passenger and freight commercial aircraft at an assembly plant in Mobile. Alabama is the only state with all the natural resources needed to make iron and steel and is the largest supplier of cast-iron and steel pipe products.
Nearly 20-million tourists invade Alabama each year seeking out Gulf beaches, old world charm, great food and southern hospitality. While Louisiana maybe famous for Mardi Gras today, the celebration actually got its U.S. start within Alabama. Several prominent sports figures hail from Alabama including baseball greats Hank Aaron and Willie Mays and boxer Joe Louis.
About Sales Taxes and this series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We’re publishing "Sales Tax Tuesday" every week through 2015.
Sales tax provides critical revenue for states. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Alabama Sales Tax Facts1:
- Alabama's State sales tax rate is currently 4% but the total tax rate can be as high as 10% depending on counties and municipalities.
- Alabama ranks in the top five for states with the highest combined state and local tax rates. For example, the total sales tax rate in Mobile is 10%, but there is also an additional restaurant tax of 1%, which means that if you are eating in Mobile you will pay a total of 11% tax on your meal.
- The Alabama Department of Revenue provides what they call "One Spot" for the collection of all Sales and Use taxes statewide.
- Sales tax in Alabama is destination-based, meaning the rate is determined by the state rate of where the item is shipped to (the buyer’s location). This means sellers must know the exact current sales tax rate for every shipment they send to a purchaser.
- Alabama is NOT a member of Streamlined Sales Tax (SST).
- Alabama has two 3-day sales tax holidays annually: One in February for Hurricane Preparedness supplies and one in August for school-related items (supplies, books, clothing and computers).
- Alabama has 57,000 retail establishments, which is one for every square mile of the state.
Nutty things you didn’t know about Alabama:
Shuffle up and deal with it. Alabama is the only state that charges a 10-cent tax on decks of playing cards. Retailers also need a special license to sell playing cards.
Vet your frustrations. In Alabama prescription drugs are tax exempt for humans but not for animals.
What a nut job: It is illegal to sell peanuts after sundown in Lee County on Wednesday.
Manual sales and use tax, and ‘entertainment tax’ management is prone to error and consumes staff time in pass-through rather than revenue-generating activities. Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avalara allows businesses to be fully sales tax compliant without sacrificing productivity.
1 - State by State Sales Tax - Alabama, Pamela Guyton and Robin Conner, Avalara – May 29, 2015