The Birmingham, AL sales tax rate is 10 percent on most retail purchases. That total combines a 4 percent Alabama state tax, a 4 percent City of Birmingham tax, and a 2 percent Jefferson County tax.1Alabama Legislature. Alabama Code 40-23-2 – Tax Levied on Gross Receipts; Certain Sales Exempt; Disposition of Funds Groceries, vehicles, farm equipment, and prescription drugs each follow different rules, which are covered below.
The 10 Percent Breakdown
- State of Alabama: 4 percent on general retail sales of tangible personal property.1Alabama Legislature. Alabama Code 40-23-2 – Tax Levied on Gross Receipts; Certain Sales Exempt; Disposition of Funds
- City of Birmingham: 4 percent.
- Jefferson County: 2 percent for locations inside Birmingham’s city limits.
Birmingham reaches slightly into Shelby County, where the county general sales tax rate is 1 percent instead of 2 percent. A purchase made at a business inside the Shelby County portion of the city is taxed at 9 percent rather than 10. Most Birmingham commerce sits in Jefferson County, so 10 percent is what most shoppers see on the receipt.
Groceries
Alabama taxes groceries, but the state’s share on food is 2 percent rather than the standard 4 percent.2Alabama Department of Revenue. Sales and Use Tax Rates Birmingham’s city tax and the county tax still apply on top, so grocery purchases are not simply taxed at 2 percent.
The state grocery tax is suspended from May 1 through June 30, 2026 under Act 2026-604.2Alabama Department of Revenue. Sales and Use Tax Rates During those two months, only the local city and county portions apply to food.
Vehicles and Farm Equipment
Cars, trucks, motorcycles, and trailers meant for highway use are taxed by the state at 2 percent of the sale price rather than 4 percent.3Alabama Department of Revenue. Guidelines for Automobile Dealers Birmingham and the county also charge reduced auto rates. The combined rate on a vehicle is well below 10 percent, with the exact figure depending on which county the dealership sits in.
Machinery used for planting, cultivating, or harvesting farm products, along with parts and attachments, is taxed at a state rate of 1.5 percent.4Alabama Legislature. Alabama Code 40-23-37 – Agricultural Machinery and Equipment Local city and county taxes still apply on top of that state rate.5Alabama Department of Revenue. Guidelines Regarding Agricultural Related Sales When used farm equipment is traded in against a new purchase, tax applies only to the net difference between the trade-in credit and the new price.
Prescription Drugs
Prescription drugs filled by a licensed pharmacist, or sold directly by a physician for human use, are exempt from Alabama’s 4 percent state sales tax.6Justia. Alabama Code 40-23-4.1 – Certain Drugs Exempt The exemption covers only the state’s share; local city and county tax treatment can differ, so the total at the pharmacy counter may not be zero.
Sales Tax Holidays
Alabama runs two annual sales tax holidays that suspend the state’s tax on qualifying items. Local jurisdictions choose whether to participate, so savings vary.
Severe Weather Preparedness
The 2026 severe weather holiday runs from 12:01 a.m. Friday, February 20 through midnight Sunday, February 22. Generators, batteries, weather radios, and other emergency supplies qualify.7Alabama Department of Revenue. 2026 Severe Weather Preparedness Sales Tax Holiday
Back-to-School
The 2026 back-to-school holiday runs Friday, July 17 through Sunday, July 19. The state exempts qualifying items up to these per-item price caps:8Alabama Administrative Code. Rule 810-6-3-.65 – Sales Tax Holiday For Back-To-School
- Clothing: $156 or less per article
- Computers and software: $1,173 or less per package
- School supplies, art supplies, and instructional material: $78 or less per item
- Books: $47 or less per book
Anything above a cap is taxed at the regular rate on the full price, not just the amount over the limit.
Filing and Deadlines for Businesses
Alabama sales tax returns and payments are due by the 20th of the month following the reporting period.9Alabama Department of Revenue. When Is the Sales Tax Due? Most Birmingham businesses file monthly, but smaller sellers can request less frequent schedules based on prior-year state liability:10Alabama Legislature. Alabama Code 40-23-7 – Taxes Due Monthly
- Quarterly if prior-year state sales tax liability was under $2,400.
- Semi-annual if liability was under $1,200, or sales occurred in no more than two 30-day periods.
- Annual if liability was under $600, or sales occurred in no more than one 30-day period.
Electronic payments must be transmitted by 4:00 p.m. Central Time on the due date to count as timely.9Alabama Department of Revenue. When Is the Sales Tax Due? State, county, and municipal returns can all be filed together through the My Alabama Taxes portal using the ONE SPOT system.11Alabama Department of Revenue. ONE SPOT
A late payment triggers a 10 percent penalty on the unpaid tax.12Alabama Administrative Code. Penalty for Failure to Timely Pay Tax If the balance is still unpaid 30 days after the Department’s first notice and demand, another 10 percent penalty applies. Interest also accrues at a rate tied to the federal underpayment rate.13Alabama Department of Revenue. Due Date Calendar for Taxes Filing a zero-balance return on time beats filing nothing when cash is tight.
Remote Sellers
Out-of-state sellers must register and collect Alabama sales and use tax, including Birmingham’s local portion, if retail sales delivered into Alabama exceeded $250,000 in the prior calendar year.14Alabama Department of Revenue. Are All Remote Sellers Required to Register in Alabama? The threshold counts both taxable and non-taxable sales and applies to direct sales; marketplace facilitators have separate rules. Registration and filing run through My Alabama Taxes and ONE SPOT, the same system in-state sellers use.