Alabama Resale Certificate Guide 2026: How to Get Yours

Alabama has one of the most complex sales tax systems in the country, with a 4% state rate that can climb as high as 11% when city and county taxes are added. What makes Alabama unusual is that many cities and counties administer their own sales taxes independently from the state. If you buy inventory or materials for resale in Alabama, understanding how the resale certificate works across these overlapping jurisdictions is essential. This guide covers everything you need to know for 2026.

Alabama Sales Tax Basics

State Rate

The Alabama state sales tax rate is 4%. But the total rate you pay depends heavily on where the transaction takes place. Cities like Birmingham can add up to 4% in local taxes, and counties add their own rates as well. Some locations in Alabama have combined rates exceeding 10%, making it one of the highest combined sales tax environments in the United States.

Origin-Based Sourcing

Alabama uses origin-based sourcing for in-state sellers. This means the tax rate is determined by the seller's location, not the buyer's. If you operate a store in Birmingham and ship to a customer in Huntsville, you charge Birmingham's rate. This is the opposite of most states, which use destination-based sourcing.

For remote sellers (those without a physical presence in Alabama), the state uses destination-based sourcing through the Simplified Sellers Use Tax (SSUT) program.

Use Tax

Alabama imposes a use tax on purchases made from out-of-state vendors when sales tax was not collected. The use tax rate matches the state sales tax rate, and local use tax may also apply. Purchases made for resale are exempt from use tax if properly documented with a resale certificate.

What Is Taxable in Alabama?

Alabama taxes most tangible personal property and some services:

• Most physical goods are taxable
• Groceries are taxable at a reduced state rate of 3% (local taxes still apply at full rate)
• Prescription drugs are exempt
• Clothing is fully taxable
• Most services are not taxable, though some specific services are
• Farm machinery and equipment qualify for reduced rates or exemptions
• Automotive vehicles are taxed at varying local rates depending on the county

What Form Do You Need?

Alabama does not have a single official state resale certificate form with a specific form number. Instead, the state allows businesses to use several accepted formats.

Accepted Certificate Formats

The Alabama Department of Revenue accepts:

• A letter or certificate format that includes all required information (buyer details, sales tax account number, description of goods, signature)
• The Multistate Tax Commission (MTC) Uniform Sales and Use Tax Certificate
• Some vendors also accept a general resale certificate template that meets Alabama's requirements

Key Fields Required

Regardless of format, your Alabama resale certificate must include:

• Purchaser's legal business name and address
• Alabama sales tax account number (or SSUT number for remote sellers)
• A statement that the purchases are for resale
• Description of the types of products being purchased
• Purchaser's signature and date
• Seller's name and address

Where to Get the Forms

The MTC Uniform Certificate is available as a free download from the Multistate Tax Commission website. You can also create a compliant certificate using a business letter format that includes all required fields. Visit the Alabama Department of Revenue at revenue.alabama.gov for additional guidance.

Who Needs an Alabama Resale Certificate?

Any business purchasing tangible personal property for resale needs an Alabama resale certificate. This includes:

Retailers buying inventory to sell through physical stores, online platforms, flea markets, or trade shows throughout Alabama.

Wholesalers and distributors purchasing goods from manufacturers for redistribution to retailers or other businesses.

Online sellers registered in Alabama who buy inventory for resale through Amazon, eBay, Etsy, Shopify, or other marketplaces.

Manufacturers buying raw materials and components that become part of a product manufactured for sale.

Restaurants and food businesses purchasing food ingredients that will be prepared and sold as meals. Given Alabama's grocery tax, this exemption is particularly relevant for food service operations.

Who Does NOT Qualify

• Consumers buying for personal use
• Businesses purchasing supplies, tools, or equipment for their own operations
• Contractors buying materials to be installed into real property (with limited exceptions)

How to Apply for an Alabama Resale Certificate

Step 1: Register for an Alabama Sales Tax Account

You need an active Alabama sales tax account before you can issue a valid resale certificate. Registration is handled through the Alabama Department of Revenue.

What you need to register:

• Federal EIN or SSN
• Business legal name and trade name (if applicable)
• Physical business address and mailing address
• Type of business entity (sole proprietorship, LLC, corporation, etc.)
• Description of products sold
• Expected start date of business activity
• Estimated monthly sales

Registration is free. Apply online through the Alabama Department of Revenue's My Alabama Taxes (MAT) portal.

Processing time: Online applications are typically processed within 3 to 7 business days.

Step 2: Complete a Resale Certificate

Prepare a resale certificate using the MTC Uniform Certificate or a letter-format certificate. Include your Alabama sales tax account number, check the resale exemption box (if using the MTC form), and describe the products you plan to purchase for resale.

Step 3: Provide the Certificate to Your Suppliers

Give the completed certificate to each vendor you purchase from. The vendor retains the certificate on file and does not charge sales tax on qualifying resale purchases.

Want help with the process? We handle everything from registration to certificate completion.

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Multi-State Considerations

Alabama accepts the MTC Uniform Sales and Use Tax Certificate, which is recognized in over 35 states. However, Alabama is not a member of the Streamlined Sales Tax (SST) agreement.

MTC Acceptance

The MTC Uniform Certificate is the most practical option for businesses that operate in Alabama and other states. One certificate format works in Alabama and dozens of other participating states.

Simplified Sellers Use Tax (SSUT)

Alabama created the SSUT program as an alternative for remote sellers. Under SSUT, out-of-state sellers can register to collect a flat 8% tax on all Alabama sales instead of tracking the varying local rates. This simplifies compliance for sellers without a physical presence in the state.

Out-of-State Sellers

Alabama's economic nexus threshold is $250,000 in sales to Alabama customers in the preceding calendar year. If you exceed this amount, you must register and collect Alabama sales tax (or enroll in the SSUT program).

Marketplace Facilitator Rules

Alabama requires marketplace facilitators to collect and remit sales tax (or SSUT) on behalf of third-party sellers. If you sell through Amazon, eBay, or similar marketplaces, the marketplace handles your Alabama tax obligations. Direct sales require your own Alabama registration.

For more on multi-state compliance, see our multi-state resale certificate guide.

Common Mistakes with Alabama Resale Certificates

Mistake 1: Ignoring Local Tax Obligations

Alabama's city and county taxes are administered separately from the state tax. Some cities require separate registration and filing. If you only register at the state level and ignore local requirements, you may face penalties from city or county tax offices. Birmingham, Montgomery, Huntsville, and Mobile all have their own local tax administrations.

Mistake 2: Confusing Origin-Based and Destination-Based Sourcing

Alabama uses origin-based sourcing for in-state sellers but destination-based sourcing for SSUT-registered remote sellers. Applying the wrong sourcing method results in collecting the wrong tax rate, which triggers audit adjustments and potential penalties.

Mistake 3: Using the Resale Certificate for Non-Resale Purchases

Purchasing office supplies, company vehicles, or business equipment with a resale certificate is a common audit trigger. Alabama auditors look specifically for purchases that do not match the buyer's typical inventory profile.

Mistake 4: Not Providing Certificates to Out-of-State Vendors

If you buy inventory from vendors outside Alabama, you should provide them with a resale certificate (MTC Uniform Certificate or equivalent). Without documentation, you may owe use tax on those purchases even if the items are for resale.

Alabama-Specific Rules You Should Know

Self-Administered Local Taxes

Alabama is one of the few states where cities and counties administer their own sales taxes independently from the state. This means you may need to file separate returns for state, city, and county taxes. Some cities contract with the Alabama Department of Revenue for administration, while others handle it entirely on their own.

The Alabama Local Tax Division and third-party administrators like the Municipal Tax Administration (MTA) collect taxes for some local jurisdictions. Check with each city and county where you do business to confirm your filing obligations.

Grocery Tax

Alabama is one of a small number of states that taxes groceries. The state rate on groceries is 3% (reduced from the standard 4%), but local taxes apply at their full rates. For food businesses buying ingredients for resale, the resale certificate exempts these purchases from both state and local sales tax.

My Alabama Taxes (MAT) Portal

The MAT portal is your central hub for managing your state sales tax account. You can file returns, make payments, update your business information, and view your account history. Note that some local jurisdictions have their own separate filing portals.

Manufacturing and Industrial Exemptions

Alabama offers sales tax exemptions for machinery used in manufacturing. This is separate from the resale exemption and requires different documentation. If your business both manufactures and sells products, you may qualify for both the manufacturing machinery exemption and the resale exemption on raw materials.

Record Retention

Alabama requires businesses to keep sales tax records, including resale certificates, for a minimum of three years from the date the tax was due. During an audit, you will need to produce certificates for every exempt sale. Missing certificates can result in the auditor assessing tax on those transactions.

How Much Can You Save?

With combined rates reaching up to 11% in parts of Alabama, the savings from a resale certificate can be substantial.

Your actual savings depend on the combined rate at your location. Use our sales tax lookup tool to find the exact rate for your city and county.

Alabama Resale Certificate FAQs

Q: Does the Alabama resale certificate expire? A: Alabama does not set a specific expiration date on resale certificates. The certificate remains valid as long as your sales tax account is active. Sellers may request updated certificates periodically.

Q: Can I use the MTC certificate in Alabama? A: Yes. Alabama accepts the Multistate Tax Commission Uniform Sales and Use Tax Certificate. This is the most common format used for multi-state businesses.

Q: Is there a fee for an Alabama sales tax account? A: No. The Alabama Department of Revenue does not charge a fee for state sales tax registration. Some local jurisdictions may have their own registration requirements.

Q: Do I need to register separately with cities and counties? A: In many cases, yes. Alabama cities and counties administer their own sales taxes. If you have a physical presence or make sales in a self-administered jurisdiction, you may need to register and file separately with that city or county.

Q: What is the SSUT program? A: The Simplified Sellers Use Tax program allows remote sellers to collect a flat 8% rate on all Alabama sales instead of tracking varying local rates. It is designed for businesses without a physical location in Alabama.

Get Started with Your Alabama Resale Certificate

Alabama's layered tax system with independent local tax administration makes proper documentation critical. Getting your resale certificate set up correctly from the start saves you from dealing with multiple tax offices during an audit.

• Expert registration guidance for state and local requirements
• Help completing the MTC certificate or letter-format certificate
• Ongoing compliance support for Alabama's unique local tax system

Get Your Resale Certificate -->

For more details on Alabama's requirements, visit our Alabama state page.

Alabama's high combined rates and self-administered local taxes make the resale certificate essential for any business buying inventory in the state. Register at the state level, confirm local obligations, and keep your certificates organized.

Related Articles

• What Is a Resale Certificate? - New to resale certificates? Start with the fundamentals.
• Common Resale Certificate Mistakes That Trigger Audits - Avoid the errors that get Alabama businesses in trouble.
• Uniform Sales Tax Certificate: Multi-Jurisdiction Guide - How the MTC certificate works across state lines.