Taxes in Alabama

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 9.24 percent. Alabama’s tax system ranks 39th overall on our 2022 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?

A Visual Guide to Unemployment Benefit Claims

April 2, 2020

March 24th Morning State Tax Update

March 24, 2020

Facts and Figures 2020: How Does Your State Compare?

February 13, 2020

Tax Trends at the Dawn of 2020

January 6, 2020

Five States Risking Lawsuits Over Their Online Sales Tax Systems

November 25, 2019

Local Income Taxes in 2019

July 30, 2019

Sales Tax Holidays: Politically Expedient but Poor Tax Policy, 2019

July 24, 2019

Facts and Figures 2019: How Does Your State Compare?

March 19, 2019

2019 State Business Tax Climate Index

September 26, 2018

Protecting Interstate Taxpayers from Discriminatory State Taxation: CSX Transportation v. Alabama Department of Revenue

May 31, 2017

Lunch Links: U.S. Treasury vs. European Tax Probe; Alabama, South Carolina Study Tax Changes; Pennsylvania Vape Tax A Job-Killer

August 29, 2016

Lunch Links: Republican Plan Upcoming for Sales Tax on Internet Buys; Walmart Avoids Excessive Tax Proposed by Puerto Rico; Explaining Why States Should Index Tax Brackets for Inflation

August 25, 2016

Lunch Links: Pairing Trump Tax Breaks Together Ill-advised; Carbon Tax an Issue in Vermont Governor’s Race; Soft Serve in Many Splendid Tax Forms

August 19, 2016

Lunch Links: Americans Not Falling for Sales Tax Holidays; Estate Tax Battle Heats Up; Alabama Discussing Gas Tax

August 18, 2016

Lunch Links: Massachusetts Marijuana Initiative Gets Clarification; Alabama Starts Tax Amnesty; Why Arizona Sales Tax is High

July 8, 2016

Lunch Links: Congressman Beats State Tax Commission; Rhode Island Revelations; Paying Property Taxes with $1 Bills

June 16, 2016

Lunch Links: Maryland Property Tax Hike, No Maine Marijuana, Do Millionaires Move Because of Taxes?

May 27, 2016

Lunch Links: Who Pays California Taxes, Shutting Down the IRS, Australia Cuts Corporate Tax Rate

May 3, 2016

Alabama Lawmakers Still Haven’t Reached a Budget Agreement

June 12, 2015

Alabama Considers Several Tax Increase Plans

May 14, 2015