State Tax Laws - Alabama

Alabama personal income tax ranges from 2% to 5%. Personal exemptions are $1500 each, standard deductions range from $2,000-$7500 depending on filing status and adjusted gross income. Social security and many other qualified pensions are exempt from tax. There is no estate tax. Although the official state sales tax is only 4% in some localities it can be as high as 12%.

Alabama has a corporate tax of 6.5% of net income that is due in addition to the business privilege tax that all business entities must pay which is based on net worth varying from $0.25 to $1.75 per every $1,000 . There is a minimum tax of $100 and a maximum tax of $15,000 for most companies. Family owned LLC’s are capped at $500. Alabama tax information can be found at: http://revenue.alabama.gov/index.cfm


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