Alabama Income Tax

Alabama has a progressive income tax with rates ranging from 2-5%. Lower income earners pay the lower rate, with the top rate applying to the highest bracket.

Alabama Sales Tax

The state sales tax rate in Alabama is 4%. With an average local sales tax of 5.24%, the combined average sales tax rate is 9.24%.

This is one of the highest combined sales tax rates in the country. Budget accordingly for large purchases.

Alabama Property Tax

The effective property tax rate in Alabama is 0.41%. With a median home value of $172,800, the median annual property tax bill is $658 ($55/month).

Alabama has some of the lowest property taxes in the nation, making homeownership more affordable.

Corporate & Business Taxes

The corporate tax rate in Alabama is 6.5%.

Other Taxes in Alabama

Tax TypeRate / Amount
Gas Excise Tax$0.29/gallon
Cigarette Tax$0.68/pack
Estate TaxNo
Inheritance TaxNo

Key Facts

One of the lowest property tax rates in the nation. Groceries are taxed at the full sales tax rate.

Compare to Other States

See how salaries compare on our average salary in Alabama page. Thinking about starting a business? Check our LLC guide for Alabama. See the current minimum wage in Alabama.

Financial Calculators

Plan your finances in Alabama with our free tools: