Does Alabama Charge Sales Tax on Services?

by TaxJar December 6, 2022


The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.

Here’s what merchants need to know about taxing services in the state of Alabama.

Are services taxable in Alabama?

Services in Alabama are generally not taxable, with a few important exceptions:

Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be taxed. For an in-depth look at Alabama sales tax, TaxJar’s guide to Alabama sales tax and the Alabama Department of Revenue has more details.


2023 Sales Tax Preparedness Guide

Discover sales tax trends and changes that could impact your compliance in 2023. You’ll also find helpful information on product taxability, and how to manage hitting economic nexus thresholds in new states this shopping season.

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