Taxes in Alabama

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 rank?  Below, we have highlighted a number of tax rates, ranks, and measures detailing Alabama’s income tax, business tax, sales tax, and property tax systems. Click the tabs below to explore! 

Top Individual Income Tax Rate

5%

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State and Local Individual Income Tax Collections per Capita

$769

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State and Local Tax Burden

8.70%

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Top Corporate Income Tax Rate

6.5%

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State Business Tax Climate Index Ranking

40

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State Sales Tax Rate

4.00%

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Average Local Sales Tax Rate

5.22%

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Combined State and Average Local Sales Tax Rate

9.22%

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State and Local General Sales Tax Collections per Capita

$570

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State Gasoline Tax Rate (cents per gallon)

27.21¢

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State Cigarette Tax Rate (dollars per 20-pack)

$0.675

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Property Taxes Paid as a Percentage of Owner-Occupied Housing Value

.40%

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State and Local Property Tax Collections Per Capita

$582

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Featured Articles

Where Do People Pay the Most in Property Taxes?

September 1, 2021

Reviewing Benefits of the State and Local Tax Deduction by County in 2018

August 25, 2021

Sales Tax Rates in Major Cities, Midyear 2021

August 18, 2021

How Well-Funded Are Pension Plans in Your State?

June 2, 2021

Biden Administration Changes to GILTI and FDII Will Yield Automatic State Tax Increases

May 25, 2021

Location Matters 2021: The State Tax Costs of Doing Business

May 5, 2021

Related Articles

Where Do People Pay the Most in Property Taxes?

September 1, 2021

Reviewing Benefits of the State and Local Tax Deduction by County in 2018

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Sales Tax Rates in Major Cities, Midyear 2021

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How Well-Funded Are Pension Plans in Your State?

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Biden Administration Changes to GILTI and FDII Will Yield Automatic State Tax Increases

May 25, 2021

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May 5, 2021

ARPA’s Tax Cuts Limitation Is a Problem for More States Than You Think

April 5, 2021

State Conformity to Federal Pandemic-Related Tax Provisions in CARES and ARPA

April 1, 2021

State and Local Tax Burdens, Calendar Year 2019

March 18, 2021

Facts and Figures 2021: How Does Your State Compare?

March 10, 2021

State Aid in American Rescue Plan Act Is 116 Times States’ Revenue Losses

March 3, 2021

Which States Are Taxing Forgiven PPP Loans?

February 22, 2021

Alabama Passes Tax Reform Aimed at Throwback, GILTI, and More

February 19, 2021

State Individual Income Tax Rates and Brackets for 2021

February 17, 2021

Where Did Americans Move in 2020?

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State and Local Sales Tax Rates, 2021

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Congress Passes $900 Billion Coronavirus Relief Package

December 21, 2020

Details and Analysis of State and Local Aid Under the Bipartisan State and Local Support and Small Business Protection Act of 2020

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