AL Sales Tax 101 Shipping States

Is Shipping Taxable in Alabama?

by Mark Faggiano

Alabama shipping taxability

Last updated July 9, 2020

One of the difficult things about sales tax is that every state is different regarding their rules. One of the most frequently asked questions is whether or not, a seller needs to charge tax on shipping and handling. Let’s take a look at how this is answered in Alabama, whether you say War Eagle or Roll Tide.

Is Shipping Taxable in Alabama?

Here is what the Alabama Department of Revenue says:

alabama freight charges

It appears there are two rules in order for a seller to be able to NOT charge sales tax on shipping and handling.

  1. You must use a common carrier or the U.S. Postal Service.
  2. The shipping and handling charges must be billed separately and be paid directly or indirectly by the purchaser.

If you deliver your goods in your own vehicle or if the shipping and handling is included in the price of the goods, then you must pay sales tax on it in Alabama.

You can read more about sales tax on shipping in Alabama here.

In Short: Shipping may be taxable in Alabama.

If you use your own vehicle or if the cost of shipping and handling is built into the price of the goods (or not billed separately), you will need to charge sales tax on shipping.

Good news though, if you use a common carrier or USPS and bill separately, you aren’t required to charge sales tax on shipping.

Still have questions regarding taxes on shipping? Start talking in the comments!

Handling Alabama Shipping and Handling Sales Tax with TaxJar

The TaxJar app defaults to the most common Alabama scenario – that shipping and handling is non-taxable.
However, if your business does charge sales tax on shipping, then TaxJar’s Shipping & Handling Override allows you to update that in your state tax settings. This will make the Alabama Expected Sales Tax Due Report more accurate. This will also tell the TaxJar API to charge sales tax on Alabama shipping.
Have questions or comments about taxable shipping in Alabama? Leave a comment and start the discussion! And to learn more about TaxJar and get started, visit TaxJar.com/how-it-works.
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