Counties/municipalities can levy sales tax of no more than 8.5%.
Current average sales tax (with local taxes included): 9.074%
Common Exceptions at State Level:
Prescription Medicine: Exempt
Gasoline Tax: 49.71 cents/gallon (Includes all state, local, and federal taxes)
Diesel Fuel Tax: 56.55 cents/gallon (Includes all state, local and federal taxes)
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 Adjusted Gross Income is less than $20,000/$500 for AGI $20,001 to $100,000/$300 if over $100,000.
Itemized Deductions Allowed?: Yes, subject to limitations.
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.
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
Income tax comments: State allows county- and city-level income tax (example: Birmingham has a 1% income tax). Part or all of federal income tax deductible.
Statewide property tax rate: Limited to $6.50 for every $1,000 of assessed value.
Local municipalities (including the state property tax) average .41% 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 for state-level taxes and up to $2,000 for county.
65 and over: 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 (unmarried): Exempt
May be eligible for additional local exemptions based on income.