Alabama Consumer Use Tax is imposed on tangible personal property purchased from out-of-state sellers for storage, use, or consumption in Alabama when Alabama sales or use tax was not collected at the time of purchase. The tax is the responsibility of the consumer and commonly applies to purchases made online, through catalogs, by telephone, or through other remote sales transactions.
When Consumer Use Tax Applies
Consumer use tax may apply to purchases from out-of-state sellers that did not collect Alabama sales or use tax on taxable property purchased for use in Alabama.
Examples of taxable purchases include:
- Clothing
- Books
- Computers and computer software
- Furniture
- Sporting goods
- Jewelry
- Electronic equipment
- CDs/DVDs
- Photographic equipment
- Lawn and garden equipment
- Automotive accessories and parts
- Musical equipment
Alabama Consumer Use Tax Rates
General Use Tax Rate — 4%
The general Alabama consumer use tax rate of 4% applies to most taxable purchases unless a different rate is specifically provided by law.
Automotive and Self-Propelled Equipment Rate — 2%
The 2% use tax rate applies to:
- ATVs
- Off-road motorcycles
- Riding lawnmowers
- Self-propelled construction equipment
- Other automotive vehicles not titled or registered by the county licensing official
Purchases of titled or registered vehicles, including automobiles, trucks, trailers, mobile homes, and motorboats, are generally taxed separately through the county licensing official and are not included in the consumer use tax worksheet calculation.
Food/Grocery Use Tax Rate
Food and grocery items, as defined in 7 U.S.C. § 2011 for purposes of the federal Supplemental Nutrition Assistance Program (SNAP), are taxed at:
- 3% for purchases made before September 1, 2025
- 2% for purchases made on or after September 1, 2025
Agriculture Use Tax Rate — 1.5%
The 1.5% agriculture use tax rate applies to:
- machinery or equipment used in connection with the production of agricultural products, livestock, or poultry on farms, and
- qualifying replacement parts for such machinery or equipment.
Reporting and Payment
- Report Alabama Consumer Use Tax on Schedule ATP, Part I, Line 1.
- Additional taxes from Schedule ATP are totaled on Part I, Line 3.
- Carry the total from Schedule ATP, Part I, Line 3 to Form 40, Page 1, Line 19 (Additional Taxes).
- If no taxable out-of-state purchases were made during the year, enter “0” and check the applicable box.
- Additional city or county use taxes may also apply and may need to be reported separately to the appropriate local taxing authority.
Important Notes
- Consumer use tax complements Alabama sales tax by taxing taxable purchases on which Alabama sales tax was not collected.
- Taxpayers should maintain records of taxable out-of-state purchases and applicable tax calculations.
- The applicable tax rate depends on the type of property purchased and the law in effect on the purchase date.
- Taxpayers required to report consumer use tax and additional taxes generally file Alabama Form 40 with Schedule ATP attached.
Source:
Form 40.pdf (Alabama Individual Income Tax Return)
Disclaimer: Always verify details with the most current Federal or State Department of Revenue Forms and Instructions. Tax laws and forms may change annually. For complex situations, consult a CPA or tax attorney.