From Birmingham and Huntsville to Montgomery and Mobile, Alabama changed how card fees are taxed in September 2026, and the way your receipt is set up now decides what your customer pays. We show you exactly what you pay and set it up correctly. No contracts, no cancellation fees.
Since September 1, 2026, Alabama does not charge sales or use tax on a credit card transaction fee, whether it is called a surcharge, a processing fee or a convenience fee, as long as it appears as a separate charge on the receipt (Act 2026-587, SB 221). Before that date the Department of Revenue taxed these fees as part of gross sales.
If the receipt shows a single total with the fee folded in, tax applies to all of it. So the same fee can cost your customer more or less depending only on how the receipt prints. We check that your terminal lists it separately.
Alabama has no surcharge law of its own, so the card-brand rules apply: a cap of about 3 percent, customer notice, a separate line on the receipt and no surcharge on debit cards. No Alabama rule covers card fees on tips, so the federal rule applies: only the proportional fee on the tip portion, and never below minimum wage.
We set up your terminal and receipts so a card fee prints on its own line, which is what keeps it out of Alabama sales tax from September 1, 2026. Then choose Dual Pricing, a surcharge within the card-brand rules, or transparent interchange-plus pricing, and we show you which costs least on your own statement.
Check any state in our surcharge checker. Rules change, so we confirm the current position before configuring anything. This is general information, not legal advice.
Send one recent statement for a free statement review. We find your true effective rate, name every fee, and show where it can come down. Savings are estimates based on your own statement.
Receipt setup matters most where tickets are large and taxable.
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