Sales tax in Lee County, Alabama runs from 5% to 9.5% depending on where the sale happens. The state charges 4%, the county adds 1%, and each city stacks its own rate on top. Auburn and Opelika both bring the total to 9%; Phenix City reaches 9.5%; unincorporated parts of the county stay at 5%.1City of Auburn. FAQs – City of Auburn
Combined Rates by Location
Alabama’s 4% state sales tax applies to most retail sales of tangible personal property.2Alabama Legislature. Alabama Code 40-23-2 – Tax Levied on Gross Receipts Lee County’s 1% levy applies countywide.1City of Auburn. FAQs – City of Auburn The city rates are where the totals diverge:
- Auburn: 4% city, for a combined 9%1City of Auburn. FAQs – City of Auburn
- Opelika: 4% city, for a combined 9%3City of Opelika. Sales and Use Tax
- Phenix City: 4.5% city, for a combined 9.5%4City of Phenix City. Taxes and Incentives
- Unincorporated Lee County: 5% total (state and county only)
The rate is set by where the store sits, not where the buyer lives. A shop a quarter-mile outside Auburn’s city limits collects 5%; one just inside collects 9%. Sellers collect and remit each layer, and the revenue flows to whichever jurisdiction imposed it.
Lower Rates on Groceries and Vehicles
Two categories carry reduced state rates that change the checkout total.
Groceries have been taxed at 2% at the state level since September 1, 2025, down from the prior 3%.5Alabama Department of Revenue. Notice State Sales and Use Tax Rate Reduced on Food Beginning September 1, 2025 The county and city portions still apply, so grocery shoppers in Auburn or Opelika pay 7% on food rather than 9%.
Motor vehicles are taxed at 2% at the state level instead of the standard 4%.6Alabama Department of Revenue. Sales and Use Tax Rates County and city rates still apply. On a $30,000 car bought in Auburn, that combined 7% works out to $600 less than the standard 9% would take.
What’s Taxed
The sales tax covers most retail sales of tangible personal property: clothing, electronics, furniture, appliances, and similar physical goods. The same statute taxes admissions to movie theaters, bowling alleys, amusement parks, athletic contests, golf courses, and public dance halls. Admissions to K-12 school athletic events are exempt from the state portion.2Alabama Legislature. Alabama Code 40-23-2 – Tax Levied on Gross Receipts
One boundary worth naming: leases and rentals of tangible personal property are covered by a separate Alabama rental tax, not the sales tax. The state rental rate is 4% for general rentals, 1.5% for automotive rentals, and 2% for linen and garment rentals, with local rates added on top.7Alabama Department of Revenue. Rental or Leasing Tax
What’s Exempt
Several categories skip Alabama sales tax entirely, and the exemption carries through to the county and city layers.
Prescription drugs filled by a licensed pharmacist, or sold directly by the prescribing physician, are exempt.8Justia. Alabama Code 40-23-4.1 – Certain Drugs Exempt Durable medical equipment, prosthetics, medical oxygen, and similar items purchased with a valid prescription and billed to Medicare, Medicaid, or a health plan are exempt from state, county, and municipal sales tax.9Alabama Legislature. Alabama Code 40-9-30 – Durable Medical Equipment Exemptions from Certain Taxes
Agriculture gets broad treatment. Fertilizer used for agricultural purposes, seeds and baby chicks for planting and raising, insecticides and fungicides for farm use, and feed for livestock and poultry (prepared dog and cat food do not qualify) are all exempt. So are antibiotics, hormones, vitamins, and other nutrients used as feed ingredients for commercial livestock, poultry, or fish.10Alabama Legislature. Alabama Code 40-23-4 – Exemptions
Sales to the federal government, the State of Alabama, Alabama public schools and universities, counties, municipalities, and certain public corporations are exempt from sales and use tax. Sellers should keep documentation of these transactions in case of an audit.
Annual Sales Tax Holidays
Alabama runs two statewide holidays that suspend the 4% state tax on qualifying purchases. Lee County and its cities have historically participated, but any local jurisdiction can opt out, so confirm the local portion before you count on the full discount.
The 2026 Severe Weather Preparedness Sales Tax Holiday runs from Friday, February 20 at 12:01 a.m. through Sunday, February 22 at midnight. Qualifying items include batteries, flashlights, weather radios, first aid kits, fire extinguishers, tarps, and duct tape priced at $94 or less per item. Portable generators and power cords qualify on a single purchase of $1,564 or less.11Alabama Department of Revenue. 2026 Severe Weather Preparedness Sales Tax Holiday Fact Sheet
The Back-to-School Sales Tax Holiday falls on the third weekend of July, starting at 12:01 a.m. Friday and ending at midnight Sunday.12Alabama Department of Revenue. Sales Tax Holidays Per-item price caps apply:
- Clothing at $100 or less per article
- Computers, software, and school computer supplies at $750 or less per single purchase
- Books at $30 or less per book (noncommercial use)
- School supplies, art supplies, and instructional materials at $50 or less per item (noncommercial use)
Caps are per item, not per cart. A $90 shirt qualifies whether your total is $100 or $500.13Alabama Department of Revenue. Back-to-School Sales Tax Holiday
Registering as a Seller in Lee County
Any business making taxable sales in Lee County has to register for a sales tax account before collecting. Registration goes through the My Alabama Taxes (MAT) portal, and the account number typically comes back in three to five business days.14Alabama Department of Revenue. Business Tax Online Registration System You’ll need your Federal Employer Identification Number (or Social Security Number for sole proprietors), the legal business name, the physical address of the retail location, a mailing address, and your start date.
Lee County businesses get one convenience worth noting: the county tax and the Auburn, Opelika, and Phenix City rates are all state-administered, so you file everything through MAT rather than sending separate returns to each city.15Alabama Department of Revenue. State-Administered Local Taxes
Filing and Payment Deadlines
Returns and payments are due by the 20th of the month after the reporting period. March sales are due by April 20.16Alabama Legislature. Alabama Code 40-23-7 – Taxes Due Monthly Smaller sellers can request less frequent filing based on prior-year state sales tax liability:
- Quarterly filing if annual state liability was under $2,400
- Semi-annual filing if under $1,200
- Annual filing if under $600
A change in filing frequency must be requested in writing by February 20 of the year it takes effect.16Alabama Legislature. Alabama Code 40-23-7 – Taxes Due Monthly At the other end, businesses averaging $20,000 or more in monthly state sales tax liability must make estimated payments by the 20th of the current month, before the final return is even filed. Electronic payments must be transmitted by 4:00 p.m. Central time on or before the due date to count as timely.17Alabama Department of Revenue. Consumers Use Tax
Penalties for Filing Late
Late returns trigger a penalty of 10% of the tax due or $50, whichever is greater.18Alabama Department of Revenue. Due Date Calendar for Taxes Administered by Sales and Use If you file on time but pay less than the full amount, a separate 10% penalty hits the unpaid balance. If any balance is still unpaid 30 days after the Department of Revenue’s first notice, another 10% stacks on top.19Alabama Administrative Code. Alabama Administrative Code 810-14-1-.30 – Penalty for Failure to Timely Pay Tax
Interest runs on top of the penalties. The 2026 rate is 7%, calculated daily (7% ÷ 365 × days late × tax owed).20Alabama Department of Revenue. Quarterly Interest Rates Filing on time with an estimated amount beats filing late in almost every case.
Use Tax on Out-of-State Purchases
Alabama’s use tax picks up what sales tax misses, most commonly online orders from vendors that don’t collect Alabama tax. The rate matches the sales tax rate at the delivery address, so an untaxed online order shipped to Auburn creates a 9% use tax obligation (4% state + 1% county + 4% city).17Alabama Department of Revenue. Consumers Use Tax
Most large online retailers now collect Alabama tax at checkout, but smaller vendors, private-party sales, and items bought out of state can still leave a use tax bill. Individuals report and pay through the same MAT portal. The frequency thresholds mirror sales tax: quarterly under $2,400, semi-annual under $1,200, and annual under $600 in prior-year liability.17Alabama Department of Revenue. Consumers Use Tax