Facts & Figures 2024: 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
Alabama Tax Rates, Collections, and Burdens
How does Alabama’s tax code compare? Alabama has a graduated state 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 also has a 4.00 percent state sales tax rate and an average combined state and local sales tax rate of 9.29 percent. Alabama has a 0.36 percent effective property tax rate on owner-occupied housing value.
Alabama does not have an estate tax or inheritance tax. Alabama has a 30.2 cents per gallon gas tax rate and a $0.675 cigarette excise tax rate. The State of Alabama collects $4,227 in state and local tax collections per capita. Alabama has $6,833 in state and local debt per capita and has a 72 percent funded ratio of public pension plans. Overall, Alabama’s tax system ranks 39th in 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 Alabama’s tax code is knowing the basics. How does Alabama 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 2024: How Does Your State Compare?
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Featured Articles
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.
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State and Local Tax Burdens, Calendar Year 2022
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 min read
State Individual Income Tax Rates and Brackets, 2024
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
8 min read
State Corporate Income Tax Rates and Brackets, 2024
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
State and Local Sales Tax Rates, 2024
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
9 min read