If you are a small business owner who sells online to customers in the US or have an e-commerce store and sell to customers in the US, you may be wondering about the sales tax rules and regulations in Huntsville, Alabama. In this blog post, we will cover the following topics:
- What is the sales tax rate in Huntsville, Alabama?
- What are the special sales tax rates in Huntsville, Alabama?
- Huntsville Tax Jurisdiction Breakdown for 2024
- How to establish (or determine if you have) sales tax nexus in Huntsville, Alabama
- What is Huntsville Economic Sales Threshold?
- ZIP Codes Associated with Huntsville and Their Respective Sales Tax Rate, County, Special, and Combined Sales Tax Rate
- Huntsville Alabama sales tax returns filing due dates
- Huntsville Alabama, sales tax returns reporting periods and thresholds
- Penalties and interests for late or non compliance with sales tax returns in Alabama
- The Sales Tax Exemptions and Refunds in Huntsville, Alabama
- How to Comply with Sales Tax Laws in Huntsville, Alabama: A Step-by-Step Guide
By the end of this blog post, you will have a better understanding of the sales tax requirements and obligations in Huntsville, Alabama, and how to comply with them.
What is the sales tax rate in Hunstville, Alabama
The sales tax rate in Huntsville, Alabama, is 9% as of 2023. This is the total of the state, county, and city sales tax rates. The Alabama state sales tax rate is 4%, the Madison County sales tax rate is 0.5%, and the Huntsville sales tax rate is 4.5%.
The sales tax rate may vary depending on the type of product or service sold, such as automotive vehicles, food, or lodging.
What are the special sales tax rates in Hunstville, Alabama
Here are some products and services that are subject to special sales tax and their rates in Huntsville, Alabama:
- Automotive vehicles: 1.75%
- Food and food ingredients: 4%
- Lodging: 13%
- Machinery and equipment used in manufacturing: 1.5%
- Farm machinery and equipment: 1.5%
These special rates apply to the state portion of the sales tax only. The county and city portions remain the same as the general rate.
The sales tax jurisdiction breakdown for Huntsville, Alabama for 2024 is as follows
Hunstville Alabama sales tax jurisdiction breakdown for 2024
| Jurisdiction | State | County | City | Total |
|---|---|---|---|---|
| Huntsville | 4.000% | 0.500% | 4.500% | 9.000% |
| Madison County | 4.000% | 0.500% | 0.000% | 4.500% |
| Alabama | 4.000% | 0.000% | 0.000% | 4.000% |
How to establish (or determine if you have) sales tax nexus in Hunstville, Alabama
You may have sales tax nexus in Huntsville, Alabama if you:
- Have a physical location in Huntsville, such as an office, warehouse, store, or inventory
- Have employees, contractors, agents, or representatives in Huntsville who perform activities related to your business, such as sales, delivery, installation, or service
- Have property or equipment in Huntsville, such as machinery, furniture, or vehicles
- Have affiliates or subsidiaries in Huntsville that sell similar products or services under a similar name or brand
- Sell or deliver products or services to customers in Huntsville through a marketplace facilitator, such as Amazon, eBay, or Etsy
- Sell or deliver products or services to customers in Huntsville through a referral agreement with a third party, such as a website, blog, or social media platform
- Sell or deliver products or services to customers in Huntsville that exceed the economic sales threshold
What is Hunstville Alabama economic sales threshold?
The economic sales threshold is the amount of sales or transactions that a remote seller (a seller who does not have a physical presence in Alabama) must make to customers in Alabama before they are required to collect and remit sales tax.
The economic sales threshold for Alabama is $250,000 or more in gross sales of tangible personal property or taxable services in the previous calendar year. This threshold applies to the state and local sales tax jurisdictions, including Huntsville.
If you are a remote seller who meets or exceeds the economic sales threshold in Alabama, you must register with the Alabama Department of Revenue and the City of Huntsville and collect and remit sales tax on your taxable sales to customers in Huntsville.
You can register online through the Simplified Sellers Use Tax Program, which allows you to remit a flat 8.000% sales tax rate to the state and receive a discount of 2.000% on the amount of tax due.
Huntsville Alabama sales tax rate, county, special and combined sales tax rate by zip codes
The ZIP codes associated with Huntsville and their respective sales tax rate, county, special, and combined sales tax rate are as follows:
Huntsville Alabama sales tax rate, county, special and combined sales tax rate by zip codes
| ZIP Code | Sales Tax Rate | County | Special | Combined Sales Tax Rate |
|---|---|---|---|---|
| 35801 | 9.000% | Madison | 0.000% | 9.000% |
| 35802 | 9.000% | Madison | 0.000% | 9.000% |
| 35803 | 9.000% | Madison | 0.000% | 9.000% |
| 35804 | 9.000% | Madison | 0.000% | 9.000% |
| 35805 | 9.000% | Madison | 0.000% | 9.000% |
| 35806 | 9.000% | Madison | 0.000% | 9.000% |
| 35807 | 9.000% | Madison | 0.000% | 9.000% |
| 35808 | 9.000% | Madison | 0.000% | 9.000% |
| 35809 | 9.000% | Madison | 0.000% | 9.000% |
| 35810 | 9.000% | Madison | 0.000% | 9.000% |
| 35811 | 9.000% | Madison | 0.000% | 9.000% |
| 35812 | 9.000% | Madison | 0.000% | 9.000% |
| 35813 | 9.000% | Madison | 0.000% | 9.000% |
| 35814 | 9.000% | Madison | 0.000% | 9.000% |
| 35815 | 9.000% | Madison | 0.000% | 9.000% |
| 35816 | 9.000% | Madison | 0.000% | 9.000% |
| 35824 | 9.000% | Madison | 0.000% | 9.000% |
| 35893 | 9.000% | Madison | 0.000% | 9.000% |
| 35894 | 9.000% | Madison | 0.000% | 9.000% |
| 35895 | 9.000% | Madison | 0.000% | 9.000% |
| 35896 | 9.000% | Madison | 0.000% | 9.000% |
| 35897 | 9.000% | Madison | 0.000% | 9.000% |
| 35898 | 9.000% | Madison | 0.000% | 9.000% |
| 35899 | 9.000% | Madison | 0.000% | 9.000% |
Hunstville Alabama sales tax returns filing due dates
The sales tax returns and payments are due on or before the 20th day of the month following the end of the reporting period.
The sales tax returns filing due dates for Hunstville, Alabama are based on the reporting period and the filing frequency.
The reporting period is the time frame for which the sales tax is calculated and reported.
The filing frequency is how often the sales tax return is required to be filed, which can be monthly, quarterly, semi-annually, or annually. The filing frequency is determined by the amount of sales tax collected by the seller in the previous year.
For example, the sales tax return for the month of January is due by February 20th. If the due date falls on a weekend or a holiday, the sales tax return is due on the next business day.
The sales tax returns must be filed electronically through the One Spot System, which is a portal that allows taxpayers to file and pay state and local sales taxes online. The sales tax payments can be made by electronic funds transfer (EFT), credit card, or check.
Hunstville Alabama sales tax returns reporting periods and thresholds
The sales tax return reporting periods and thresholds for Hunstville, Alabama, are as follows:
- Monthly: The reporting period is the calendar month. The filing frequency is monthly for sellers who collected more than $200 in sales tax in the previous calendar year.
- Quarterly: The reporting period is the calendar quarter (January-March, April-June, July-September, October-December). The filing frequency is quarterly for sellers who collected less than $200 but more than $50 in sales tax in the previous calendar year.
- Semi-Annually: The reporting period is the semi-annual period (January-June, July-December). The filing frequency is semi-annually for sellers who collected less than $50 but more than $25 in sales tax in the previous calendar year.
- Annually: the reporting period is the calendar year (January-December). The filing frequency is annually for sellers who collected less than $25 in sales tax in the previous calendar year.
Sellers can request to change their filing frequency by submitting a written request to the Alabama Department of Revenue before February 20th of each year.
Huntsville Alabama sales tax penalties and interests for late or non compliance
The penalties for late filing and late payment are as follows:
- Late Filing Penalty: The greater of 10% of the tax due or $50 for each month or part of a month that the sales tax return is not filed, up to a maximum of 25% of the tax due or $750, whichever is less.
- Late Payment Penalty: 10% of the tax due for each month or part of a month that the sales tax is not paid, up to a maximum of 25% of the tax due.
- Combined Penalty: The sum of the late filing penalty and the late payment penalty, up to a maximum of 25% of the tax due or $750, whichever is less.
The interest for late payment is as follows:
- Interest: The interest rate is the same as the federal short-term rate plus 3%, compounded daily. The interest rate is adjusted quarterly and published by the Alabama Department of Revenue. The interest is calculated from the due date of the sales tax return until the date of payment.
Sellers who fail to file or pay their sales tax returns may also be subject to criminal penalties, such as fines, imprisonment, or both, if they are found to have willfully evaded or attempted to evade the sales tax laws.
The sales tax exemptions and refunds in Hunstville, Alabama
Some sales of tangible personal property and services are exempt from sales tax in Hunstville, Alabama, either by state law or by local ordinance.
Some examples of Huntsville Alabama exempt sales are:
- Sales to the federal, state, or local governments or their agencies
- Sales to nonprofit educational, religious, or charitable organizations
- Sales of prescription drugs, prosthetic devices, or durable medical equipment
- Sales of food and food ingredients for human consumption
- Sales of machinery and equipment used in manufacturing, farming, or mining
- Sales of automotive vehicles, trailers, or semitrailers
Sellers who make exempt sales must obtain a certificate of exemption from the buyer and keep it in their records as proof of the exemption. The certificate of exemption must include the name and address of the buyer, the reason for the exemption, the signature of the buyer or their authorized representative, and the date of the sale. The certificate of exemption must be renewed every three years.
Sellers can apply for a certificate of exemption from the Alabama Department of Revenue by completing the appropriate application form and submitting it to the relevant office. The application form can be found on the department’s website.
Buyers who paid sales tax on exempt purchases can claim a refund from the seller or from the Alabama Department of Revenue. To claim a refund from the seller, the buyer must provide the seller with a certificate of exemption and a written request for a refund within 180 days of the purchase.
To claim a refund from the department, the buyer must file a petition for refund and provide the necessary documentation, such as invoices, receipts, and proof of payment. The petition for refund must be filed within three years of the purchase.
Conclusion
By following the guidelines and procedures that we have explained in this blog post, you can prevent common problems and difficulties and make sure that you are paying the right amount of sales tax to the Alabama Department of Revenue. You can also benefit from the sales tax exemptions and refunds that are offered to certain kinds of buyers or sellers, reducing your costs and efforts. We hope that this blog post has been useful and enlightening for you. If you have any questions or feedback, please do not hesitate to share them below