State Tax in Alabama

Throughout the United States the taxes you pay in your state depend entirely on the laws of the state you reside in. Most states have certain taxes that are the same in each city or county within the state lines. Other states, like Alabama, allow certain cities and counties within their borders determine certain tax rights on their own. This means that anyone moving to Alabama or within the borders of Alabama must conduct their own research before moving to a city or county.

Sales Tax in Alabama

One state tax in Alabama that affects everyone in the state is sales tax. While many states offer exemptions on certain products like food and clothing that are considered necessities Alabama only offers one major exemption. The state sales tax is not placed on prescription drugs. This exemption helps countless individuals who fill prescriptions monthly but there are many in the state that would prefer an exemption on food or clothes.

Fortunately, there are other benefits to living in Alabama even if you are not able to utilize the exemption on prescription drugs. The gasoline state tax in Alabama is only 20.2 cents per gallon which is half the price of the state tax in many other states. The state sales tax in many cities is only four per cent but some cities and counties can raise the rate up to 12 per cent. Inquire about the sales tax of the county or city you are interested in residing in or else you might find yourself getting an unpleasant shock.

Property Taxes in Alabama

Alabama does not require individuals to pay taxes on their personal properties such as computers or even boats. Different cities and counties in Alabama do have to the right to determine their own mileage rates and ad valorem tax for vehicles. Individuals in Alabama who are 65 years of age or older are completely exempt from all property taxes. This can come as an extreme relief to seniors especially if they are living on an extremely fixed income.

Estate Taxes

Many individuals starting the process of estate planning dread dealing with the thought of estate taxes being placed on the legacies that they wish to leave for their children, friends, or distant relatives. In order to set residents minds at ease Alabama no longer requires that an inheritance tax be paid to the state after a passing. The estate taxes are also only collected by the federal government.

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