2026 tax year · Alabama

Marketplace seller taxes in Alabama

Etsy, eBay, Shopify and the rest report your gross and withhold nothing. The gap between that and what you are actually taxed on is your costs, in Alabama that gap is worth $7,182 in tax.

Take a driver who grossed $45,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the marketplace seller page $26,775 comes off and $18,225 is left as taxable profit. That profit is what Alabama and the IRS charge against.

What that leaves you owing in Alabama

Alabama uses graduated 2026 income tax brackets topping out at 5%, across 3 brackets, on top of federal income tax and self-employment tax.

Self-employment tax$2,575
Federal income tax$67
Alabama income tax$807
Total tax$3,449
Effective rate on gross7.7%

Earning more in Alabama

A single filer taking the standard deduction, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:

VolumeGrossMileage offTaxable profitAlabama taxTotal taxRate on gross
Part-time $15,000 $0 $15,000 $657 $2,776 18.5%
Steady side income $45,000 $0 $45,000 $2,051 $10,631 23.6%
Full-time $72,000 $0 $72,000 $3,306 $18,109 25.2%

Switching state opens that state's page.

Enter your numbers and press Calculate to see your 2026 estimate.

Alabama specifics that change the number

Alabama also has local income tax that the estimate above does not model, some cities: Birmingham 1%, etc.. Add it separately for where you live and work.

Selling into and out of Alabama

Income tax follows you: Alabama taxes your profit wherever the buyer was. Sales tax does not. Marketplace facilitator laws make the platform collect and remit sales tax on your behalf in most states, which is why a seller can have customers in all fifty and still file only one income tax return. Selling off-platform is where that stops being true.

On $18,225 of profit, what the states around Alabama would charge:

StateIts taxvs Alabama
Florida No income tax −$871
Tennessee No income tax −$871
Mississippi $729 −$142
Georgia $946 +$75

Marketplace seller tax questions in Alabama

How much should an Alabama seller set aside?

About 7.7% of gross on the $45,000 example, $3,449 across self-employment tax, federal income tax and $807 to Alabama. Set aside from each payout rather than finding it in April.

Does the $45,000 on my 1099-NEC match what Alabama taxes?

No. Alabama taxes profit, not gross. After $26,775 of deductions the taxable figure is $18,225, so the Alabama bill is $807 rather than what gross alone would suggest.

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