Taxes are a common theme on news shows in the U.S.; you may have even seen the Tax Foundation’s very own Kyle Pomerleau speaking about the presidential candidates’ tax plans. However, Americans rarely see a sitcom or...
The Facts on Alabama's Tax Climate
5%individual income taxTop rate
6.5%corporate income taxFlat rate
$531property taxcollections per capita
Alabama's Individual Income Tax System
Alabama's personal income tax system consists of three brackets and a top rate of 5%. That rate ranks 20th lowest among states levying an individual income tax. Alabama's state and local income tax collections per person were $648 in 2012 which ranked 15th lowest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Alabama's Corporate Income Tax System
Alabama's corporate income tax system consists of a flat rate of 6.5%. That rate ranks 25th lowest among states levying a corporate income tax. Alabama's state and local corporate income tax collections per person were $86 in 2012 which ranked 13th lowest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita
50-State Table of State Corporate Income Tax Collections Per Capita
Alabama Sales and Excise Taxes
Alabama levies a 4% general sales or use tax on consumers, which is below the national median of 5.95%. The average local sales tax rate is an additional 4.91%. Alabama's state and local governments collect $863 per person in general sales taxes and $551 per person in excise taxes, for a combined figure of $1414, which ranks 22nd lowest nationally. Alabama's gasoline tax stands at 20.9¢ (11th lowest nationally), while its cigarette tax stands at $0.43 (5th lowest nationally.)
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
Alabama Property Tax Collections Lowest in Nation
Alabama's state and local governments collected approximately $531 per person in property taxes in 2012, which ranks lowest nationally.
State and local property tax collections per capita by state
Tax Freedom Day Arrives on April 7th in Alabama
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2014, Alabama taxpayers worked until April 7th (5th earliest nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: Tennessee, April 5th (ranked 4th earliest nationally); Georgia, April 12th (ranked 19th earliest nationally); Florida, April 15th (ranked 25th latest nationally); and Mississippi, April 2nd (ranked 2nd earliest nationally).
Alabama's State and Local Tax Burden Below National Average
Alabama's 2011 tax burden of 8.3% ranks 10th lowest out of 50 states, and is below the national average of 9.8%. Alabama's taxpayers pay $2886 per capita in state and local taxes.
Alabama's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
Alabama's 2015 Business Tax Climate Index Ranks 28
Alabama ranks 28th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property, including residential and commercial property. The ranks of neighboring states are as follows: Tennessee, 15th, Georgia, 36th, Florida, 5th, and Mississippi, 18th.
State Business Tax Climate Index (full study)
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