State Individual Income Tax Rates and Brackets for 2023
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
22 min read
Alabama Tax Rates, Collections, and Burdens
How does Alabama’s tax code compare? Alabama has a graduated individual income tax, with rates ranging from 2.00 percent to 5.00 percent. There are also jurisdictions that collect local income taxes. Alabama has a 6.50 percent corporate income tax rate. Alabama has a 4.00 percent state sales tax rate, a max local sales tax rate of 7.50 percent, and an average combined state and local sales tax rate of 9.25 percent. Alabama’s tax system ranks 39th overall on our 2024 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and Alabama is no exception. The first step towards understanding the Alabama tax code is knowing the basics. How does Alaska collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?
Tax Data by State
Get facts about taxes in your state and around the U.S.
State Tax Data
Individual Taxes
Business Taxes
Sales Taxes
Featured Articles
State and Local Sales Tax Rates, Midyear 2023
Compare the latest 2023 sales tax rates as of July 1st. Sales tax rate differentials can induce consumers to shop across borders or buy products online.
8 min read
State Corporate Income Tax Rates and Brackets for 2023
New Jersey levies the highest top statutory corporate tax rate at 11.5 percent, followed by Minnesota (9.8 percent) and Illinois (9.50 percent). Alaska and Pennsylvania levy top statutory corporate tax rates of 9.40 percent and 8.99 percent, respectively.
6 min read
Facts & Figures 2023: How Does Your State Compare?
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Unpacking the State and Local Tax Toolkit: Sources of State and Local Tax Collections (FY 2020)
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
29 min read
2023 State Business Tax Climate Index
While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
129 min readAll Related Articles
Cigarette Taxes and Cigarette Smuggling by State, 2021
People respond to incentives. As tax rates increase or products are banned from sale, consumers and producers search for ways around these penalties and restrictions.
17 min read
How High Are State and Local Tax Collections in Your State?
Contrary to initial expectations, the pandemic years were good for state and local tax collections, and while the surges of 2021 and 2022 have not continued into calendar year 2023, revenues remain robust in most states and well above pre-pandemic levels even after accounting for inflation.
4 min read
How Do Taxes Affect Interstate Migration?
The latest IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.
7 min read
Excise Taxes and Fees on Wireless Services Drop Slightly in 2023
To alleviate the regressive impact on wireless consumers, states should examine their existing communications tax structures and consider policies that transition their tax systems away from narrowly based wireless taxes and toward broad-based tax sources.
18 min read
Blog
Short FormThe Short Form: Do People Really Move Because of Taxes?
What do The Rolling Stones, NFL star Tyreek Hill, and Maryland millionaires have in common? They all moved because of taxes.
4 min read
2024 State Business Tax Climate Index
In recognition of the fact that there are better and worse ways to raise revenue, our Index focuses on how state tax revenue is raised, not how much. The rankings, therefore, reflect how well states structure their tax systems.
111 min read
What Is the Real Value of $100 in Metropolitan Areas?
The differences in purchasing power can be large and they have significant implications for the relative impact of economic and tax policies across the United States.
3 min read
How Are Electric Vehicles Taxed in Your State?
The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns.
4 min read
County Data Shows Repealing SALT Cap Would Benefit High-Income Earners
Any move to repeal the cap or enhance the deduction would disproportionately benefit higher earners, making the tax code more regressive.
5 min read