The DOR has issued guidance for drop-shipments into Alabama and remote sellers in the Simplified Sellers Use Tax FAQs found on their website.
The State of Alabama does not issue sales tax licenses (resale certificates) to remote businesses (no business locations in Alabama). Alabama views drop-shipping as two separate transactions. The transaction between the vendor/drop-shipper and reseller is one transaction, and the transaction between the reseller and the Alabama customer is a separate transaction. It is Alabama’s stance that the vendor/drop-shipper should accept the home-state issued resale certificate when the reseller is purchasing to resell to a customer located in Alabama (drop-shipped to an Alabama address). If the sale between the remote reseller and the Alabama customer is considered taxable, the remote reseller is responsible for collecting and remitting taxes to Alabama.
All buyers of retail property for resale purposes are entitled to purchase at wholesale, tax-free, the property they resell as a regular course of business when they have secured the sales tax license required by law. This rule also applies to retailers located outside Alabama when they have secured the sales tax license required by law in the state in which they are located. (Section 40-23-6) (Adopted August 10, 1982, readopted through APA effective October 1, 1982)
For More Information Visit the Alabama Department of Revenue