Navigating sales tax compliance in Birmingham, Alabama, can be challenging for businesses of all sizes. Understanding the local regulations, Alabama sales tax rates, local taxes, and filing requirements is critical to staying compliant and avoiding penalties. At Kintsugi, we simplify sales tax compliance and integrations for businesses, helping you focus on growth without the headache of managing complex tax rules. In this guide, we’ll break down everything you need to know about sales tax in Birmingham for 2025.

Sales Tax Rate Birmingham (Alabama)

As of January 1, 2025, the total sales tax rate in Birmingham, Alabama, is 10%, comprised of a 4% state tax, a 2% Jefferson County tax, and a 4% city tax. In 2007, Birmingham enacted the Economic and Community Revitalization Ordinance, adjusting local sales tax rates to fund city improvements.

(Note: Sales tax rates are subject to change. Check the Alabama Department of Revenue’s website for the latest updates.)

Birmingham Sales Tax Calculator

Imagine you own a furniture store in Birmingham, and a customer purchases a sofa for $1,500. You need to calculate how much sales tax to charge and determine the final total the customer must pay.

Step 1: Identify the Sales Tax Rate in Birmingham, AL

As of January 1, 2025, the sales tax rate in Birmingham, AL, is 10%. This rate includes:

• Alabama State Sales Tax: 4.00%

• Jefferson County Sales Tax: 2.00%

• City of Birmingham Sales Tax: 4.00%

Step 2: Convert the Sales Tax Rate to Decimal Form

To use the tax rate in a calculation, convert 10% into decimal form by dividing by 100:

10% = 10 ÷ 100 = 0.10

Step 3: Multiply by the Sale Price

Now, multiply the price of the sofa by the sales tax rate:

1,500 × 0.10 = 150.00

So, the sales tax on the sofa is $150.00.

Step 4: Calculate the Total Amount Due from the Customer

To determine the final total, add the sales tax to the original price:

1,500 + 150 = 1,650.00

Final Breakdown:

• Sofa Price: $1,500

• Sales Tax (10%): $150.00

• Total Amount Customer Pays: $1,650.00

What If a Customer Buys Multiple Items?

If a customer purchases multiple taxable items, follow the same process. Suppose they also buy a coffee table ($250) and a lamp ($100) in the same transaction.

1. Add Up All Taxable Items:

1,500 + 250 + 100 = 1,850

2. Multiply by the Sales Tax Rate:

1,850 × 0.10 = 185.00

3. Add the Sales Tax to the Total:

1,850 + 185.00 = 2,035.00

So, the customer owes $2,035.00 for their entire purchase.

Why This Matters for Your Business

• Ensures compliance with Birmingham sales tax law and incorporates revenue management to prevent penalties.

• Accurate tax collection prevents overcharging or undercharging customers.

• Sales tax must be remitted to the Alabama Department of Revenue, ensuring proper financial reporting.

• Keeping track of sales tax simplifies bookkeeping and tax filing.

FAQ on Sales Tax in Birmingham AL

What is Sales Tax in Birmingham Al?

Sales tax in Birmingham, Alabama, is determined by the local zip code and is a tax applied to the sale of goods and certain services, collected by businesses and remitted to state and local authorities.

What is the Sales Tax Rate in Birmingham AL?

As of January 1, 2025, the total sales tax rate in Birmingham, AL, is 10%, which includes 4% state tax, 2% Jefferson County tax, and 4% city tax.

How much is Birmingham AL tax?

The total tax on purchases in Birmingham is 10%. For example, on a $100 taxable purchase, the total tax would be $10, making the final cost $110.

Birmingham Sales Tax Filing Steps