Sales tax on SaaS in Alabama: rates, thresholds and open questions
The Department of Revenue lists a 4% state general sales and use tax rate, with city and county rates published separately, and a flat 8% Simplified Sellers Use Tax rate for eligible remote sellers. Under Rule 810-6-2-.90.03, an out-of-state seller must register and collect once its retail sales of tangible personal property into the state exceed $250,000 a year, based on the previous calendar year. That threshold sits well above the more than $100,000 in sales or 200 or more transactions the Supreme Court upheld for South Dakota in Wayfair. Each state draws its own line on SaaS; California, for example, begins taxing it on January 1, 2027. Because the state rule is silent on SaaS itself, confirm your position with an accountant before launch.





