Alabama collects a state income tax, with rates of 2 percent, 4 percent and 5 percent. In addition to a state sales tax, counties and cities are allowed to collect taxes on purchases made in their jurisdictions. More on Alabama taxes can be found in the tabbed pages below.
Income
Sales
Property
Estate
Other
Personal income tax
Alabama collects income taxes from its residents at the following rates.
For single persons, heads of families and married persons filing separate returns:
-- 2 percent on the first $500
of taxable income
-- 4 percent on taxable income
between $501 and $3,000
-- 5 percent on all taxable income over $3,000.
For married persons filing joint returns:
-- 2 percent on the first $1,000
of taxable income
-- 4 percent on taxable income
between $1,001 and $6,000
-- 5 percent on all taxable income over $6,000.
Depending on a taxpayer's adjusted gross income and filing status, some Alabama residents see their standard deduction amount increase up to $7,500. The standard deduction remains at $2,000 or $4,000 for other taxpayers whose incomes exceed certain income thresholds. Details on the change can be found in the Standard Deduction Chart.
Similarly, the dependent exemption has been increased for some taxpayers up to a maximum of $1,000 per dependent, depending upon the adjusted gross income of the taxpayer. The dependent exemption remains at $300 per dependent for other taxpayers whose incomes exceed certain income thresholds.
File Form
40 by April 15 or the next business day if the 15th falls on a weekend or holiday.
Individual
income tax returns can
be downloaded as online
forms. Filers have
the option of completing
an online form in which
they can enter data.
It will make calculations
and compute the amount
of tax due. The taxpayer
can then print the completed
form, sign it and mail
it.
All Alabama taxpayers can e-file their returns and some might be able to e-file for free at the Revenue Department's online filing page.
Sales tax
Alabama's Sales
and Use Tax Section administers, collects and enforces taxes
in 16 different categories.
Alabama's general
tax rate is 4 percent on purchases of tangible property.
The
State of Alabama administers
more than 200 different city
and county sales taxes.
The collection of these
additional taxes could
make some jurisdictions'
overall sales tax rate
substantially higher
than 4 percent.
Search the Alabama Department of Revenue's online database of cities and counties that levy sales, use, lodgings and rental taxes to find your local rates. This page maintains updates of tax rate changes.
Personal and real property taxes
The Property Tax Division of the
Alabama Department of Revenue supervises and controls the valuation,
equalization and assessment of ad valorem taxes of all property
in the state. Additionally, the office provides guidance to
the county
officials in the performance of their official duties.
Click here for a list of exemptions to
ad valorem tax collection.
Each county has its own millage
rate that is used when determining property taxes. Some
cities also assess separate property taxes.
A homestead
exemption is granted by the state on real property taxes,
with a larger exemption available to older or disabled taxpayers.
Click here to view the state's homestead summary chart. To apply for an
exemption, contact either the tax assessor or revenue commissioner
in your county of residence.
More information is available at
the Property Tax Division's Web
site.
Inheritance and estate taxes
Alabama
estate tax returns, affidavits
of estate tax and estate tax
waivers are no longer required
for estates whose owners died
after Dec. 31, 2004. If no
filing extensions were granted,
Sept. 30, 2005 was the final
reporting date for any 2004
estate tax liabilities. Call
(334) 242-1000 for details about
Alabama's estate tax requirements.
Alabama
taxpayers can get additional
information and help at one
of the state's Taxpayer
Service Centers.
Alabama law provides for an annual sales tax holiday that begins at 12:01 a.m. on the first Friday in August and ends at midnight the following Sunday. Counties and cities may choose whether to participate, as noted on this Web page.
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