U.S. flag An official website of the United States government.

Dot gov

The .gov means it's official.
Federal government websites always use a .gov or .mil domain. Before sharing sensitive information online, make sure you’re on a .gov or .mil site by inspecting your browser's address (or "location") bar.

SSL

This site is also protected by an SSL (Secure Sockets Layer) certificate that's been signed by the U.S. government. The https:// means all transmitted data is encrypted  — in other words, any information or browsing history that you provide is transmitted securely.

Alabama listed among the most tax-friendly states

  • October 2, 2015

BIRMINGHAM, Ala. — Washington, D.C-based finance and business magazine Kiplinger recently named Alabama among the most tax friendly states in the nation.
Though the state has been embroiled in its own battle over whether or not to raise taxes to increase revenue, it still remains one of the lowest-tax states on net.

Coming in at #5, Kiplinger noted Alabama’s low income, sales, and property taxes, but also mentioned the relatively uncommon practice of taxing groceries.

State income tax: 2% (on income up to $500/individual, $1,000/joint) – 5% (on income of more than $3,000/individual, $6,000/joint)

State sales tax: 4%

Gas taxes and fees: 21 cents per gallon

Alabama’s property taxes are the second-lowest in the U.S. (Hawaii has the lowest on a percentage basis, helped by the sky-high value of property there.) Median tax on the state’s median home value of $122,700 is just $532.

It doesn’t take much income to find yourself in the state’s top income tax bracket, where a 5% rate kicks in for those making as little as $3,000 for single filers and $6,000 for married couples. However, the Yellowhammer State allows residents to deduct all federal income tax from state taxable income.

While the state sales tax rate is a modest 4%, additional levies from state and local jurisdictions boost the average combined rate to 8.9%, among the highest in the U.S. And unlike most states, Alabama doesn’t exempt food from its sales tax. Prescription drugs and insulin-related items are exempt.

Here are the top 10 most tax-friendly states, according to Kiplinger:

Delaware
Wyoming
Alaska
Louisiana
Alabama
Mississippi
Arizona
New Mexico
Nevada
South Carolina

Article by Elizabeth Beshears, original link here.