Alabama sales tax at a glance
| Type of tax | Sales and use tax |
|---|---|
| State rate | 4% |
| Local rates | Average 5.46%, highest 8.00% |
| Average combined rate | 9.46% |
| Groceries | 2% state + localThe state rate on SNAP-eligible food fell from 3% to 2% on 1 September 2025 (Act 2025-305). Local sales taxes still apply; localities may lower their own food rates. |
| Prescription drugs | ExemptPrescription drugs and insulin are exempt. Prescription drugs for animals are taxable. |
| Clothing | Taxed (July back-to-school holiday)Clothing is taxed at the full rate, except articles of $156 or less during the July back-to-school holiday where the locality takes part. |
Local averages are population-weighted figures from the Tax Foundation: State and Local Sales Tax Rates, Midyear 2026 (rates as of 1 July 2026). They are a guide, not the rate at any one address. For the exact rate where you buy, use the Alabama Department of Revenue sales tax rate lookup.
Worked examples
$150 of groceries at the average local rate
| Rate | 2% grocery + 5.46% local = 7.46% |
|---|---|
| Price before tax | $150.00 |
| Sales tax | $11.19 |
| Total | $161.19 |
Working: $150.00 × 7.46% = $11.19. Groceries pay the 2% state food rate plus the full local rate. Local taxes are most of the bill here, so check whether your city has lowered its food rate.
Working back from a $109.46 total at 9.46%
| Rate | 4% state + 5.46% local = 9.46% |
|---|---|
| Price before tax | $100.00 |
| Sales tax | $9.46 |
| Total | $109.46 |
Working back: $109.46 ÷ 1.0946 = $100.00, so the tax was $9.46. At the average combined rate of 9.46%, a total of $109.46 means the item cost exactly $100 before tax. Most of that tax goes to local governments.
Why Alabama local rates are so high
Alabama lets both counties and cities levy sales tax, and many do both, so local tax often adds 5% to 6% on top of the 4% state rate. The Tax Foundation puts the population-weighted local average at 5.46% and the highest local rate at 8%, which means some purchases are taxed at 12%. Rates change often, so look up the exact address with the Department of Revenue's rate lookup before you rely on a figure. Some cities and counties also collect their own tax directly instead of through the state; the Department publishes a contact list for these self-administered localities.
Grocery tax cut to 2%
Alabama cut its state sales tax on food from 4% to 3% in 2023, then to 2% on 1 September 2025 under Act 2025-305. "Food" follows the federal SNAP definition: groceries for home use, but not alcohol, tobacco or hot, ready-to-eat food. The cut is state only. City and county sales taxes still apply to groceries at their normal rates, unless a locality chose to lower its own food rate, which the 2025 act allows. On a $150 grocery bill at the average local rate, the cut saves $1.50 compared with 2024.
Alabama sales tax holidays
Alabama has two yearly holidays. The back-to-school holiday ran from 17 to 19 July 2026 and covered clothing up to $156 per article, computers up to $1,173, school supplies up to $78 and books up to $47; the caps are now indexed to inflation. The severe weather preparedness holiday runs over the last full weekend of February. The state exemption always applies, but cities and counties must opt in, so local tax can still be due in some places.
Alabama vs. neighboring states
| State | State rate | Avg. combined | Groceries |
|---|---|---|---|
| Alabama | 4% | 9.46% | 2% state + local |
| Mississippi | 7% | 7.06% | 5% (since July 2025) |
| Tennessee | 7% | 9.61% | 4% state + local |
| Georgia | 4% | 7.56% | No state tax; local tax applies |
| Florida | 6% | 6.98% | Exempt |
Average combined rates are from the Tax Foundation, midyear 2026 report. See sales tax rates for every state for the full table.