Updated: The 2025 sales tax holiday in Alabama has ended.
Alabama shoppers had something to look forward to in July: Back-to-school savings. Savvy shoppers could purchase school supplies, computers, and clothing free from the state’s sales tax. This was a big deal since Alabama has one of the highest sales tax rates in the U.S.
Of course, the tax holiday was just one of the ways the Cotton State is cutting back on sales tax this year.
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You may have heard about the recent state tax exemption on diapers, or that Alabama’s grocery tax is due for another reduction in September.
Here’s what you need to know about the Alabama tax-free weekend and the state’s sales tax laws in the coming months.
When was tax-free weekend in Alabama?
The annual back-to-school Alabama sales tax holiday ran from 12:01 AM on Friday, July 18 until midnight on Sunday, July 20.
During this time, many types of school supplies (including computers and tablets) and clothing were exempt from Alabama’s usual 4% sales tax rate.
What was included in the Alabama tax-free weekend?
The Alabama tax-free weekend included clothing, school supplies, books, and electronics, like computers.
Clothing was tax-free during the Alabama sales tax holiday as long as each piece did not exceed $100.
Tax-exempt clothing items included jackets, jeans, shoes, belts, hats, and diapers (though diapers are about to be made temporarily state sales tax-free for a longer period — more on that later).
What clothing was not tax-free? A few items were not considered clothing. Here are a few examples of items you still had to pay tax on during the Alabama tax-free weekend:
- Athletic gear (shin guards, shoulder pads, roller skates, athletic shoes, or sports gloves).
- Jewelry, watches, and hair accessories.
- Handbags and briefcases.
- Cosmetics (including makeup).
- Sunglasses, eyeglasses, and contacts (prescription or nonprescription).
- Belt buckles.
A few eligible electronics and other school supplies were tax-exempt during the tax-free weekend.
However, non-educational video games and computer parts that were sold separately did not qualify.
Alabama had a tax-free holiday on electronics. Eligible purchases included computers and printer supplies (printer paper, printer ink) as well as flash drives and tablets.
- Purchases could not exceed $750.
- Items produced solely for recreation did not qualify.
School supplies were eligible for the Alabama tax-free weekend.
Almost all school supplies were fair game during the Alabama sales tax holiday.
To qualify, each item must have cost $50 or less.
- Art supplies (paints, clay, drawing pads, scissors, etc.).
- Book bags, lunch boxes, binders, notebooks, and folders.
- Calculators and writing tablets.
- Many books with a sales price of $30 or less per book.
- Required textbooks on an official school book list, with a sales price of more than $30 and less than $50.
Note: Although many school supplies were tax-free, some are not. Items used for “clean room apparel and equipment” were not tax-free, including cleaning supplies, paper towels, and hand sanitizer.
For a full list of qualifying items, visit the state’s Department of Revenue website.
Alabama tax-free diapers plus savings on baby products and more
You could purchase diapers tax-exempt during Alabama’s tax-free weekend. Soon you won’t have to wait for a tax holiday, though.
That’s because Alabama recently passed legislation that will temporarily eliminate state sales tax on popular family essentials. In addition to diapers, other items will soon be state sales tax-exempt:
- Baby formula and bottles.
- Pump equipment and baby wipes.
- Maternity clothing and feminine hygiene products.
Alabama will exempt these products and diapers from state sales tax beginning September 1, 2025. However, the sales tax exemption is temporary and will expire on August 31, 2028, unless future legislation extends the provision.
Alabama grocery tax cut: Food taxes
Alabama is one of the states that still taxes groceries. Yet the Cotton State recently passed legislation to reduce the sales tax on grocery items in the coming months.
Beginning September 1, 2025, the Alabama grocery tax rate will reduce from 3% to 2%. But the Alabama grocery tax cut may have come at a price.
As reported by Kiplinger, a prior Alabama law made income earned from overtime (hours exceeding 40 per week) exempt from state taxes. The law, which went into effect last year, expired earlier in 2025.
According to the Institute on Taxation and Economic Policy (ITEP), the “no tax on overtime” provision was initially expected to cost Alabama $34 million in revenue. However, the total cost grew to be about 10 times as much.
“For this reason, Alabama lawmakers chose not to renew [no tax on overtime],” reports ITEP, “Instead using the savings to reduce the state’s grocery tax and fund other priorities.”
Meanwhile, with a sales tax cut on groceries from 3% to 2%, Alabama residents will see a $1 reduction for every $100 spent on eligible grocery items.
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