Alabama State Taxes
Quick Tax Facts
Income Tax: 2% – 5%
State Sales Tax: 4%
Median Property Tax: $398
Overview
Alabama is considered one of the more tax-friendly states. It is the only state that currently allows its residents to fully deduct the amount they pay in federal income taxes from their state income tax liability. Property taxes are also some of the lowest in the United States. Although its state sales tax rate is only 4%, additional levies at the local level make the combined average of 9.24% one of the highest in the nation. Alabama is also one of only a handful of states that still imposes state sales tax on groceries.
Alabama Income Tax
Alabama has a graduated personal income tax rate that ranges from 2% to 5%. Certain jurisdictions also collect local income taxes. Bessemer, Birmingham, and Macon County each levy an income tax of 1% in addition to the state income tax. Gadsden County levies an income tax of 2%.
| Alabama Individual Income Tax Rates By Filing Status |
|---|
| Single, Head of Household, and Married Filing Separately | 2% – First $500 of taxable income 4% – Next $2,500 of taxable income 5% – All taxable income over $3,000 |
| Married Filing Jointly | 2% – First $1,000 of taxable income 4% – Next $5,000 of taxable income 5% – All taxable income over $6,000 |
Who Must File?
Full- and part-time residents must file an individual income tax return if any of the following is true:
- Single filing status with $4,000 or more in gross income while an Alabama resident.
- Married filing separately and at least $5,250 in gross income while a resident.
- Head of Household status and $7,700 or more in gross income while residing in the state.
- Married filing jointly with at least $10,500 in gross income while living in Alabama.
Non-residents must also file an Alabama income tax return if their income from the state exceeds the allowable prorated personal exemption.
Alabama Sales Tax
Alabama’s sales tax rate is 4%. Each city, county, and special district may also impose an additional sales tax. The maximum allowed at the local level is 7.5%. Currently, the average combined state and local sales tax rate is 9.24%, one of the highest in the country.
Certain items are exempt from sales tax, including but not limited to: prescription drugs, gasoline, motor oil (excluding kerosene and fuel oil), fertilizers used for agricultural purposes, feed for livestock, as well as livestock sales.
Alabama Property Taxes
Alabama property taxes are based on property classification, millage rates, and exemptions. The median property tax for an Alabama resident is approximately $398 per year. It is one of the lowest in the country.
| Highest | $905 |
|---|---|
| Median | $398 |
| Lowest | $206 |
Yearly Cost Per Resident
Alabama Tax Holidays
Alabama has two annual sales tax holidays.
- Severe Weather Preparedness. The Severe Weather Preparedness Sales Tax Holiday begins at 12:01 AM on the Friday of the last full weekend in February and ends at midnight on the following Sunday. You can view a list of eligible items here.
- Back-to-School Sales Tax Holiday. Held on the third Friday in July, this sales tax holiday begins at 12:01 AM and ends at midnight the following Sunday. Eligible items include clothing ($100 or less per item), computers ($750 or less), books ($30 or less per item), and school supplies ($50 or less per item).
Alabama Tax Resources
If you need assistance preparing your Alabama state taxes, you can speak with a tax professional from Tax Defense Network by calling 855-476-6920.
You can also visit the Alabama Department of Revenue website for additional resources.
- Alabama Tax Refund Hotline: 855-894-7391
- Individual Income Tax Phone Number: 334-242-1170, Option 1
- Corporate Income Tax Questions: 334-242-1170, Option 6
- Income Tax Payment Options
- Tax Due Dates
- Request for Waiver of Penalty
