Free guide for contractors
Do contractors charge sales tax in Alabama?
General information, not tax advice. Tax rules change and depend on the details of each job. Confirm how they apply to your business with your accountant or the state's revenue department before relying on them.
AL Alabama
Usually no tax on the invoiceNo, for real property work. Alabama contractors pay sales or use tax on building materials when they buy them.
Alabama's rule says building materials bought by builders and contractors are subject to sales or use tax at the time of purchase.
Builders and contractors include anyone making repairs, alterations or additions to real property, so the rule covers repair work as well as new construction.
The rule does not apply to cook stoves, refrigerators, washing machines and portable heaters. Those are not building materials.
It turns on: whether the item becomes part of the real property; whether the item is a freestanding appliance.
Watch out for
- On government projects, contractor exemption certificates are issued per project and are not transferable; each contractor or subcontractor applies for its own (Alabama DOR, Government Contractor's Certificate of Exemptions FAQ).
“are subject to either Sales or Use Tax at the time of purchase.”Ala. Admin. Code r. 810-6-1-.27(3)