What is the sales tax rate in Madison?
The combined sales tax rate in Madison, Alabama is between 5.5% and 9% as of 2026. It is made up of the Alabama statewide base rate of 4%, plus applicable Madison County and local district taxes. Madison sits within Madison County, and the rate can vary slightly across ZIP codes because of special district additions (see the ZIP breakdown below).
Sales tax in Alabama is administered by the Alabama Department of Revenue, which collects and distributes tax on behalf of the state and its local jurisdictions. The rate applies to most retail sales of tangible personal property delivered within Madison.
Who needs to collect sales tax in Madison, Alabama?
Any business with sales tax nexus in Alabama must register, collect, and remit sales tax on taxable sales delivered to Madison. Nexus is established through:
- Physical presence: an office, store, warehouse, employee, or inventory located in Alabama.
- Economic nexus: exceeding $250,000 in sales to Alabama customers in the current or prior year.
- Marketplace facilitators: platforms such as Amazon or Etsy collect and remit on behalf of their third-party sellers.
Out-of-state (remote) sellers that cross Alabama's economic nexus threshold must register with the Alabama Department of Revenue before continuing to sell into the state.
How do you register for a sales tax permit in Madison?
To collect sales tax in Madison, you must register for a sales tax permit with the Alabama Department of Revenue. Registration is generally free. You will typically need your EIN or SSN, business entity details, bank account information, and an estimate of your monthly Alabama sales. Most permits are issued within a few business days of an online application.
How do you charge the right sales tax in Madison?
Sales tax in Madison is charged based on the delivery address. For orders shipped to a Madison address, the combined rate of between 5.5% and 9% generally applies; for in-store sales, the rate is based on the store's location. Because some ZIP codes within Madison County carry additional special-district taxes, always confirm the exact rate for the specific delivery ZIP code. The tables below show the most common Madison ZIP codes and how Madison compares with other cities in Madison County and across Alabama.
