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