Alabama economic nexus threshold for sales tax
Data version 2026-Q3 · reviewed 2026-07-14
If you sell into Alabama without a physical presence, you may still be required to register for, collect, and remit sales tax once your sales cross the state's economic nexus threshold. Here is where Alabama stands.
Alabama threshold at a glance
| Revenue threshold | $250,000 |
|---|---|
| Transaction threshold | None |
| How they combine | Revenue only |
| Measurement period | Previous calendar year |
| State sales-tax rate | 4% |
What this means for remote sellers
Alabama uses a revenue-only economic nexus threshold. You establish nexus once your gross sales into Alabama reach $250,000 during previous calendar year. The number of separate transactions does not affect the threshold.
How Alabama compares to other states
At $250,000, Alabama sets a higher bar than the typical $100,000 threshold — only 2 jurisdiction(s) require this much in sales. It is one of 29 jurisdictions that look at revenue only — the number of transactions does not count. Its 4% base sales-tax rate sits below the roughly 5.7% average state rate.
How the Alabama threshold is measured
Alabama measures the threshold over Previous calendar year. Gross sales generally include taxable and (in many states) exempt sales; rules on marketplace-facilitated sales vary. Verify the specifics with the Alabama department of revenue.
Do marketplaces collect Alabama sales tax?
Alabama requires marketplace facilitators — platforms such as Amazon, Etsy, eBay, and Walmart — to collect and remit Alabama sales tax on sales made through them. If you sell only through those marketplaces, the platform generally collects the tax for you. Sales you make directly — through your own website or store — still count toward your Alabama economic nexus threshold and remain your responsibility. Whether marketplace-facilitated sales also count toward your own threshold varies, so confirm with the Alabama Department of Revenue.
What to do if you've crossed it
- Register with the Alabama Department of Revenue for a sales-tax permit.
- Begin collecting tax on taxable sales to Alabama customers.
- File and remit on the schedule the state assigns.
- Confirm treatment of marketplace sales and any local taxes with a professional.
Not sure where you stand?
Check your economic nexus exposure across all 50 states and DC in seconds — free.
Tools to get compliant
Triggered nexus somewhere? These tools handle registration, collection, filing, and remittance so you don't have to.
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Alabama economic nexus FAQ
What is the economic nexus threshold in Alabama?
Alabama uses a revenue-only economic nexus threshold. You establish nexus once your gross sales into Alabama reach $250,000 during previous calendar year. The number of separate transactions does not affect the threshold.
Do remote sellers have to collect Alabama sales tax?
If your sales into Alabama cross the threshold ($250,000) during previous calendar year, you generally must register, collect, and remit Alabama sales tax.
Does Alabama count the number of transactions?
No. Alabama measures only revenue ($250,000); the number of transactions does not matter.
When did Alabama's economic nexus rules take effect?
Alabama began enforcing economic nexus on October 1, 2018. Economic nexus stems from the 2018 South Dakota v. Wayfair Supreme Court decision; states phased in their rules afterward. Note: Simplified Sellers Use Tax (SSUT) program available for remote sellers.
What is the sales tax rate in Alabama?
Alabama's statewide base sales-tax rate is 4%. Local jurisdictions may add their own tax, so the total rate at a given address is often higher. Once you establish nexus, you collect at the combined state and local rate for the destination.
Do marketplaces like Amazon collect Alabama sales tax?
Yes. Alabama requires marketplace facilitators — platforms such as Amazon, Etsy, eBay, and Walmart — to collect and remit sales tax on sales made through them. Sales you make directly, through your own website or store, still count toward your Alabama economic nexus threshold.
How do I register for a Alabama sales tax permit?
Register with the Alabama Department of Revenue. You will need your business information and the date you first crossed the threshold. After registering, the state will assign a filing frequency based on your sales volume.
Related states
Informational only — not legal or tax advice. Verify with the Alabama department of revenue and a qualified professional.