SALES TAX:

• Statewide: 4.0%
• Counties can levy sales tax of no more than 7.5%.
• Current average sales tax (with local taxes included): 7.97%

To unlock additional tax information including military pay, personal and retirement income, property, and more, login or join below.

SALES TAX:

• Statewide: 4.0%
• Counties can levy sales tax of no more than 7%.
• Current average sales tax (with local taxes included): 7.931%
• Common Exceptions at State Level:
  • Prescription Medicine: Exempt
• Gasoline Tax: 39.61 cents/gallon (Includes all state, local and federal taxes)
• Diesel Fuel Tax: 46.55 cents/gallon (Includes all state, local and federal taxes)
• Cigarette Tax: 67.5 cents/pack of 20

Personal Income Tax

• Personal Income Tax Rate Range: 2% (0 to $500 taxable income)/4% ($500-$3,000)/5% (on income over $3,000)
• Standard deduction: Single filing Status: $2,500/Married Filing Jointly: $7,500. Decreases as income rises but no less than $2,000 and $4,000, respectively.
• Personal Exemption Allowance: $1,500
• Dependent Exemption: $1,000 if AGI is less than $20,000/$500 for AGI $20,000 to $100,000/$300 if over $100,000.
• Itemized Deductions Allowed?: Yes, subject to limitations.
• Retirement Income
  • Social Security: Exempt
  • IRAs: Exempt with some exceptions.
  • 401Ks/Defined contribution employer retirement plans: Exempt with some exceptions.
  • Private pensions: Exempt with some exceptions.
  • Public Pensions: Exempt with some exceptions.
• Military Pay
  • Active Duty Pay: Taxable to the extent included in federal AGI
  • Military Retirement Pay: Exempt
  • Military Disability Pay: Exempt
  • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
  • SBP/SSBP/RCSBP/RSFPP: Generally Exempt
  • Income tax comments: State allows county- and city-level income tax (example: Birmingham has a 1% income tax).

Property Tax

• Statewide property tax rate: Limited to $6.50 for every $1,000 of assessed value.
• Local municipalities (including the state property tax) average .42% of the property's assessed value.
• Calculation of assessed value: 10% of fair market value.
• Relief programs for:
  • Owner-occupied: May be eligible for up to $4,000 exemption of assessed value.
  • Over 65: Exempt from all state-level property taxes if income less than $12,000 and $5,000 of assessed value exempt at the county level. If income under $7,500, exempt from all property taxes. If income over $12,000, exempt from all state-level property taxes and $5,000 of assessed value exempt at the county level.
  • All totally and permanently disabled: Exempt from all property taxes.
  • Veteran/Surviving Spouse: Exempt
  • May be eligible for additional local exemptions based on income.
• Personal Property Tax: None

Inheritance & Estate Taxes: None

Department of Revenue website: www.revenue.alabama.gov