Sales tax is due on the sale of tangible personal property and is due from the consumer (customer). If a business is engaged in selling tangible personal property, they should add the tax to the sales invoice and collect the sales tax from the customer at the time of purchase.
Sales tax is also due on the gross receipts from places of amusement or entertainment.
The general sales tax rate in the City of Alabaster is 10% (State of Alabama= 4%, Shelby County= 1%, and City of Alabaster= 5%). If applicable, businesses may check with each agency to obtain their automotive, farm equipment and manufacturing rates. In the City of Alabaster all sales are taxed at the City's general rate of 5%, with the exception of automotive vehicles at ½% and farm machinery which is also ½%. Farm Machinery only applies to equipment used in planting, cultivating and harvesting farm products or used in the connection with the production of agricultural produce or products, livestock or poultry on farms, coal mining and the replacement parts of such machines.
Our Automotive rate includes new and used automotive vehicles, truck trailers, semi-trailers, and mobile homes.
Our Machinery Rate only includes equipment which is used in planting, cultivating and harvesting farm products or used in connection with the production of agricultural produce or products, livestock or poultry on farms, and the replacement parts of such machines.
Common Sales Tax Exemptions
These are sales to a licensed retail merchant, jobber, dealer or others who are purchasing for resale. It is the seller's responsibility to obtain and keep on file the purchaser's valid sales tax number or exemption number. The State of Alabama Department of Revenue can verify that a number is valid.
Sales of Tax Exempt Items
Certain items are specifically exempt from sales tax. Examples - lubricating oil, gasoline, livestock feed and other exemptions. Please verify whether an item is exempt before making the sale.
Sales to Tax Exempt Organizations
The State of Alabama, counties and cities within the State are exempt from paying tax on their purchases. Effective October 1, 2000, sales to contractors and subcontractors of personal property to be incorporated into realty pursuant to a contract with an exempt governmental agency are exempt from tax.
Some organizations are exempt by special acts of the Legislature. A listing of these is found in rule number 810-6-3-.07.05. Some examples of these organizations are the Alabama Sheriffs Boys Ranch, Boy and Girl Scouts, YMCA and YWCA. Churches are not tax exempt, and not all non-profit organizations are tax exempt. If there is a question about exemption, call to verify before making the sale.
Out of State Deliveries / Shipments
Generally, businesses are not required to collect tax on deliveries/shipments of retail sales made outside this State.
Note: Sales tax is due the City of Alabaster on merchandise that is picked up by the purchaser or the purchaser's agent from an Alabaster location or on merchandise that is delivered to the purchaser at a location in the City of Alabaster. Do not remit sales tax to the City of Alabaster on sales that are shipped or delivered outside the City of Alabaster.
Withdrawals From Inventory for Use or Installation
Sales tax applies to withdrawals from inventory on purchases made tax free which are later withdrawn from inventory for use by the business or for installation in fulfilling a contract to make additions, improvements or alterations to real property. The measure of sales tax is the cost (price paid) for the item withdrawn by the person making the withdrawal. The tax is due at the time and place of withdrawal, regardless of the place where used. If this type activity is applicable to a business in Alabaster, the sales tax is due Alabaster on all withdrawals regardless of the place used or installed.
The following type businesses should obtain a clear understanding of the tax laws pertaining to their business activities:
- Any business that does not have a clear understanding of their tax liability.
- Businesses that make retail sales and also provide labor in conjunction with those sales.
- Dual businesses that make both retail sales and withdrawals from inventory for installation to improve or alter real property.
- Manufacturers that make sales and also install the manufactured product.