Credit card processing and merchant services in Mobile, AL
The City of Mobile collects its own sales and use tax each month through its Revenue Department, so a Mobile business reports to the City as well as to the state.
Mobile runs its own sales tax office. According to the City's sales and use tax page, the Revenue Department administers Mobile's privilege license tax ordinances, which includes collecting sales and use taxes every month. City Ordinance 34-033, passed on June 24, 2003, took effect that October 1 and replaced the decades-old gross receipts tax with sales and use taxes.
In practice that means at least two returns. The City's goes to the Revenue Department monthly. The state's share, 4% on most goods and 2% on food since September 1, 2025, is reported to the Alabama Department of Revenue. Put both due dates on the calendar before opening day.
Hotels have another rate to get right. The Department of Revenue's Mobile County rate listing shows the City of Mobile's lodging tax at 8% inside the city limits and 3% in the police jurisdiction. Two properties a short drive apart can owe different city rates, so confirm which side of the city limits your address falls on before you load rates into a booking system.
The Census Bureau estimated 200,824 Mobile residents in July 2025, ahead of Birmingham's 195,893 and Montgomery's 195,300. As for card fees, Alabama has no statute on surcharges that we know of, which leaves the card networks' own ceilings, 3% for a Visa credit card and 4% for a Mastercard one, with debit excluded. Hotels and rental businesses taking deposits by phone or email can use our virtual terminal to key a card or send a payment link. Before you add any fee, let a free statement review show you what interchange-plus pricing would cost instead.
Rules that matter in Mobile
Mobile's monthly city sales and use tax return
The City of Mobile's Revenue Department administers the City's privilege license tax ordinances, which includes collecting sales and use taxes monthly. City Ordinance 34-033, passed June 24, 2003, took effect October 1, 2003, replacing the gross receipts tax with sales and use taxes.
The state's share (4% general, 2% on food since September 1, 2025) is reported separately to the Alabama Department of Revenue.
Sources: City of Mobile, Sales and use tax; Alabama Department of Revenue, State sales, use and lodgings tax rates
Mobile lodging tax inside the city and in the police jurisdiction
The Alabama Department of Revenue's rate listing for Mobile County shows the City of Mobile's lodging tax at 8% within the city limits and 3% in its police jurisdiction. Confirm which applies at your property's address, and what other lodging taxes apply on top, before you set room rates.
Source: Alabama Department of Revenue, Sales and use tax rates: Mobile County
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Common questions
Who collects city sales tax in Mobile, AL?
The City of Mobile's Revenue Department, which administers the City's privilege license tax ordinances and collects sales and use taxes monthly. The state's 4% general rate, or 2% on food, is reported to the Alabama Department of Revenue on a separate return, so plan for both.
What lodging tax does a Mobile, Alabama hotel collect for the city?
8% inside the city limits and 3% in the police jurisdiction, according to the Alabama Department of Revenue's Mobile County rate listing. Those are the City of Mobile's shares. Ask the City's Revenue Department what else applies at your address before you publish room rates.
Is it legal for a Mobile, AL restaurant to surcharge credit cards?
Alabama has no surcharge law we've found, so yes, under the card networks' rules. A Visa credit surcharge can't top 3% or your cost, a Mastercard one can't top 4% or your cost, and Visa asks for 30 days' notice to whoever provides your merchant account. Debit cards are excluded. On an $85 dinner, 3% is $2.55.
How can a Mobile business take a deposit over the phone?
With a virtual terminal, you can type in the card number during the call, or email an invoice or payment link the customer can pay later. Card-not-present sales generally carry higher interchange than tapped ones, so look at that line in a free statement review.
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Disclaimer: general information, not professional advice
This page is general educational information, not legal, tax, accounting or financial advice. Rules and rates vary by place and change, so confirm them with the official source and a qualified professional before you act. Full terms are in our Terms of Service.
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