Inside the city limits, Mobile, Alabama sales tax runs 10% on most retail purchases: 4% to the state, 5% to the city, and 1% to Mobile County. That combined rate is one of the higher ones in Alabama, and it applies to everything from a shirt at the mall to a restaurant meal, with some categories taxed at reduced rates and a handful of exemptions worth knowing about.
How the 10% Breaks Down
Three governments share your receipt:
- Alabama state sales tax: 4%
- City of Mobile sales tax: 5%
- Mobile County sales tax: 1%
The state rate comes from Alabama Code sections 40-23-2 and 40-23-61.1Alabama Department of Revenue. State Sales and Use Tax Rates The county rate inside Mobile is 1% for general retail, but it changes for specific categories like vehicles and machinery.2Mobile County License Commission. Tax Rates
Use tax works as the mirror image of sales tax. If you buy something from outside Mobile (an online order, for example) and no sales tax was collected, the city charges the same 5% use tax when you bring the item into Mobile for use.
The Police Jurisdiction Rate
Just outside the city limits sits an area Mobile patrols called the police jurisdiction. The city’s sales tax rate there is half the in-city rate, so 2.5% instead of 5%. State and county portions stay the same, so the combined tax in the police jurisdiction is lower than the full 10% charged inside city limits.
Reduced Rates for Vehicles, Machinery, and Farm Equipment
Big-ticket categories are taxed more lightly. At the county level inside Mobile, automobiles are taxed at 0.5%, and manufacturing machinery and farm equipment are each taxed at 1%.2Mobile County License Commission. Tax Rates The city also charges a reduced rate on these categories rather than the full 5%. If you’re buying a vehicle or industrial equipment in Mobile, confirm the exact combined rate with the City of Mobile Revenue Department before you close, because the savings against the 10% default are real.
Groceries, Restaurants, and Lodging
Groceries are not exempt from Mobile’s city sales tax. Alabama runs a separate 2% state tax on food for home consumption, and the state has temporarily suspended that 2% from May 1 through June 30, 2026 under Act 2026-604. But the city’s 5% and the county’s 1% still apply, so Mobile shoppers continue paying at least 6% in local tax on groceries even while the state portion is paused.3Alabama Department of Revenue. Sales and Use Tax Rates
Restaurants inside the city are subject to an additional food and beverage tax on top of the general sales tax, and they file through a separate Food and Beverage Tax Form with the Revenue Department.4City of Mobile. Revenue Forms and Applications If you operate a restaurant in Mobile, contact the Revenue Department for the current rate.
Hotels and short-term rentals carry a 10% city lodging tax inside the city limits and 5% in the police jurisdiction.5City of Mobile. Public Notice of Lodging Tax Rate Change Mobile County adds another 2% lodging tax.2Mobile County License Commission. Tax Rates Combined with the state lodging levy, the total hospitality tax burden is significant.
What’s Exempt and When
Mobile’s ordinance incorporates Alabama’s state exemptions, so anything exempt from state sales tax is also exempt locally.6City of Mobile. Sales and Use Tax Common examples include wholesale sales to licensed resellers, sales to the federal government, and certain agricultural and industrial inputs.
Alabama also runs two annual sales tax holidays, and most Mobile-area jurisdictions participate:
- Severe Weather Preparedness, February 20–22, 2026. Portable generators and power cords up to $1,564 per purchase are tax-free, along with individual preparedness items (flashlights, batteries, weather radios, first-aid kits, fire extinguishers) costing $94 or less each.7Mobile County. Severe Weather Preparedness Sales Tax Holiday
- Back to School, July 17–19, 2026. Clothing, computers, books, and school supplies are exempt up to per-item dollar limits set by the Alabama Department of Revenue. Individual municipalities can opt out, so check the state’s participation list.8Alabama Department of Revenue. Sales Tax Holidays
Mobile’s city code also provides for an exemption on certain items during the first full weekend of August, established separately from the state holidays.9Mobile, AL. Mobile Code of Ordinances – Chapter 34 – Licenses and Taxation
Online Purchases and Out-of-State Sellers
Buying from out of state doesn’t necessarily avoid Alabama tax. Under the state’s Simplified Sellers Use Tax (SSUT) program, remote sellers with more than $250,000 in annual Alabama sales either collect and remit a flat 8% use tax or comply with notice and reporting requirements. That flat 8% replaces the patchwork of city and county rates, which simplifies compliance for out-of-state sellers.10Alabama Department of Revenue. Simplified Sellers Use Tax (SSUT)
Marketplace facilitators like Amazon, eBay, and Etsy that exceed the $250,000 threshold must collect SSUT on behalf of their third-party sellers for orders delivered into Alabama.11Alabama Administrative Code. Rule 810-6-2-.90.04 Requirements for Certain Marketplace Facilitators If you sell through one of those platforms, the facilitator handles the tax on those orders. Sales you make through your own website remain your responsibility.
If You’re a Business Collecting Mobile Sales Tax
Before your first sale, you need accounts with both the Alabama Department of Revenue and the City of Mobile Revenue Department. The state side is handled through the My Alabama Taxes (MAT) portal.12Alabama Department of Revenue. My Alabama Taxes Sign-Up The city side goes through its Revenue Department, which administers Mobile’s privilege license and collects monthly sales and use taxes.13City of Mobile. Revenue Department You’ll need your Federal Employer Identification Number (or SSN), the business’s legal name and address, owner and officer information, your state sales tax account number, a description of your activity, and an estimated monthly tax liability. The city’s Revenue Department can be reached at 251-208-7462 or in person at 205 Government Street, South Tower, Room 243.4City of Mobile. Revenue Forms and Applications
Filing and Payment Deadlines
City sales tax returns are filed monthly, covering the prior month’s sales. Returns are due on the first of the month and become delinquent after the 20th.14City of Mobile. Revenue FAQs Zero-sales months still require a filed return. Skip it and you can get a penalty on a $0 balance.
The state portion is filed through My Alabama Taxes. The city has its own set of forms, broken out by tax type: general sales, consumer use, sellers use, rental and lease, rental motor vehicles, and others.4City of Mobile. Revenue Forms and Applications Save every confirmation number. If you pay by electronic funds transfer, the payment information has to be transmitted by 4:00 p.m. Central Time on or before the due date. Hit submit at 4:30 p.m. on the 20th and it counts as late.
Penalties and Interest
Late filing penalties stack fast. The structure used locally works like this:
- Late filing: the greater of 10% of taxes due or $50.
- Late payment: 10% of taxes due.
- Prolonged delinquency once an account is in collections: 1% per month, up to 25% of the balance, instead of the flat 10%.
A zero-balance return filed late still triggers the $50 minimum penalty.15Mobile County License Commission. Penalty
Interest runs on top of penalties. For the first quarter of 2026, the Alabama Department of Revenue has set the rate at 7% annually, computed daily: 7% divided by 365, multiplied by days late, multiplied by tax owed.16Alabama Department of Revenue. Quarterly Interest Rates The rate can change each quarter, so check the posted rate for any older balance.
Keep Records for Six Years
Alabama requires businesses to keep records related to sales, use, or rental tax liability for at least six years from the date the return was filed.17Alabama Administrative Code. Rule 810-27-1-7-.01 That means invoices, receipts, exemption certificates from wholesale buyers, and copies of filed returns with their confirmation numbers. If an audit comes, clean six-year records are what keep the review routine instead of becoming an estimated assessment.