• Origin-Based Sales Tax: Tax is collected based on the seller’s location.

• Destination-Based Sales Tax: Tax is collected based on the buyer’s location where goods are delivered or received.

Alabama uses destination-based sales tax to ensure that tax revenues are allocated to the jurisdictions where consumers reside and utilize the goods. This approach aligns tax collection with consumption, providing local governments with the necessary funds for services and projects in the areas where the goods are actually used.