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, a 4.00 percent state sales tax rate, and an average combined state and local sales tax rate of 9.46 percent. Alabama has a 0.37 percent effective property tax rate on owner-occupied housing value. Alabama does not have an estate tax or inheritance tax. Alabama’s gas tax is 31 cents per gallon, and its cigarette excise tax is $0.675 per pack of 20 cigarettes.
Alabama raises tax revenue primarily through general sales taxes (32.6 percent of total state and local tax revenue), individual income taxes (24.0 percent), and other taxes (21.6 percent). Alabama collects $4,950 in state and local tax collections per capita, carries $5,470 in state and local debt per capita, and has a 78 percent funded ratio of public pension plans. Alabama’s tax system ranks 37th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Alabama is no exception. Use the tabs below to compare Alabama taxes with other states and to see how Alabama raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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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.
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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?
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Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.
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