The Facts on Alabama's Tax Climate
5%individual income taxTop rate
6.5%corporate income taxFlat rate
$548property taxcollections per capita
Alabama's Individual Income Tax System
Alabama's individual income tax system consists of three brackets with a top rate of 5%. The top rate ranks 29th highest among states levying an individual income tax. Alabama's state and local tax collections per person were $687 in 2013, which ranked 37th highest nationally.
50-State Table of Individual Income Tax Rates
Alabama's Corporate Income Tax System
Alabama's corporate income tax system consists of a flat rate of 6.5%. That rate ranks 24th highest among states levying a corporate income tax. Alabama's state and local corporate income tax collections per person were $79 in 2013 which ranked 42nd highest nationally.
50-State Table of Corporate Income Tax Rates
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 5%. Alabama's state and local governments collect $902 per person in general sales taxes and $547 per person in excise taxes, for a combined figure of $1,449, which ranks 27th highest nationally. Alabama's gasoline tax stands at 20.87 cents per gallon, 40th highest nationally, while its cigarette tax stands at $0.68, 38th highest nationally.
50-State Table of State and Local Sales Tax Rates
Alabama Property Tax Collections Average
Alabama's state and local governments collected approximately $548 per person in property taxes in 2013, which ranks 50th nationally.
Tax Freedom Day Arrives on April 8th in Alabama
Tax Freedom Day is the day when Americans have finally earned enough money to pay off their total tax bill for the year. In 2016, Alabama taxpayers have to work until April 8th (4th earliest nationally) to pay their total tax bill.
Alabama's State and Local Tax Burden Ranks 39th
Alabama's 2016 Business Tax Climate Index Ranks 29th
Alabama ranks 29th on the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes (25th), individual income taxes (22nd), sales taxes (41st), unemployment insurance taxes (26th), and taxes on property (17th), including residential and commercial property.
State Business Tax Climate Index (full study)
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