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Taxes

Sales Taxes
               
State Income Tax
                                

State Sales Tax - 4%
City Sales Tax - 4%
County Sales Tax - 1%
Total Sales Tax - 9%

 

Married/File Joint
First $1,000 - 2%
Next $5,000 - 4%
Over $6,000 - 5%

 

Single/Head Household
First $500 - 2%
Next $2,500 - 4%
Over $3,000 - 5%

 
 

Ad Valorem - Residential property is taxed at a rate of 33 mills x 10 precent of assessed value. There is a homestead exemption for totally disabled persons or persons over 65 years of age with $7,500 or less income if they live on the property. Other exemptions are based on individual situations. Income from specified Alabama Retirement Systems, the United States Civil Service Retirement System, Military Retirement Systems and benefits received under a "defined benefit plan," as defined under Section 414(j) of the Internal Revenue Code, are exempt from Alabama income tax.

 

Alabama Cost of Living And Taxes:

How far your retirement money can go is dependent on two things, the local cost of living, which normally does not address taxes, and state and local taxes. This site provides information and links to assist in your retirement location decision making process.

In 2008, Alabama ranked 46th in a ranking of states by "effective state and local tax burdens." Alabama's tax burden as a percentage of income was 8.6 percent, as opposed to the U.S. average of 9.7 percent. Alabama tax burden per capita was $3,144 as compared to the U.S. average of $4,283. (Source: www.retirementliving.com/RLtaxburdens.html)

A net pay calculator allows you to calculate taxes on income and compare to other locations. Visit www.paycheckcity.com/conpw/netpaycalculator.asp.

Cost of living comparator allows quick cost of living comparisons between communities; four links are provided:

  1. Bankrate Cost of Living Comparison (uses current ACCRA data)
  2. CNN Money Cost of Living Comparison

 

Taxes:

State and local taxes are a significant factor in selecting a retirement location. Alabama is consistently ranked within the bottom 10 percent of states for cost of state and local tax burdens. A ranking of states can be found at www.retirementliving.com/RLtaxburdens.html. Information on specific state taxes and exemptions is provided below.

For frequently asked tax questions visit www.revenue.alabama.gov/incometax/itfaq01.htm.

 

Sales Taxes:

State sales tax is 4 percent; prescription drugs exempt. The rate can go as high as 12 percent depending on city and county taxes. The state administers over 200 different city and county sales taxes; however, it does not administer all county or city sales taxes. To view city or county sales, use, lodging or rental taxes go to www.revenue.alabama.gov/salestax/sales/.

Sales, Use, Lodgings and Rental Tax Rates Detail Report:

City: Dothan
Locality Code: 9653
County Location: Houston County
 
 

Current Tax Rates as of the June 1, 2009:

Tax Type   Rate Type   Rate   Active Date   Action   PJ    Administrator
CONSUMERS USE   AUTO   0.750%   06-01-2009   AC   N    ALATX
CONSUMERS USE   FARM   0.750%   06-01-2009   AC   N    ALATX
CONSUMERS USE   GENERAL   4.000%   06-01-2009   RC   N    ALATX
CONSUMERS USE   MFG. MACHINE   0.750%   06-01-2009   AC   N    ALATX
                          
LODGINGS   GENERAL   6.000%   06-01-2009   RC   N    ALATX
SALES TAX   AUTO   0.750%   06-01-2009   AC   N    ALATX
SALES TAX   FARM   0.750%   06-01-2009   AC   N    ALATX
SALES TAX   GENERAL   4.000%   06-01-2009   RC   N    ALATX
SALES TAX   MFG. MACHINE   0.750%   06-01-2009   AC   N    ALATX
SALES TAX   VENDING   3.000%   06-01-2009   AC   N    ALATX
SALES TAX   W/D FEE   $3.750   06-01-2009   AC   N    ALATX
                          
SELLERS USE   AUTO   0.750%   6-01-2009   AC   N    ALATX
SELLERS USE   FARM   0.750%   6-01-2009   AC   N    ALATX
SELLERS USE   GENERAL   4.000%   6-01-2009   RC   N    ALATX
SELLERS USE   MFG. MACHINE   0.750%   6-01-2009   AC   N    ALATX

 

State Tax Rates:

Tax Type     Rate Type         Rate                              
CONSUMERS USE     AUTO     2.000%                              
CONSUMERS USE     FARM     1.500%                              
CONSUMERS USE     GENERAL     4.000%                              
CONSUMERS USE     MFG. MACHING     1.500%                              
               
LODGINGS TAX        GENERAL (MOUNTAIN LAKES AREA)    5.000%
LODGINGS TAX        GENERAL (ALL OTHER AREAS)    4.000%
               
RENTAL TAX        AUTO    1.500%
RENTAL TAX        LINENS/GARMENTS    2.000%
RENTAL TAX        GENERAL    4.000%
               
SALES TAX        AUTO    2.000%
SALES TAX        FARM    1.500%
SALES TAX        GENERAL    4.000%
SALES TAX        MFG. MACHINE    1.500%
SALES TAX        VENDING (FOOD PRODUCTS)    3.000%
SALES TAX        VENDING (ALL OTHER)    4.000%
               
SELLERS USE        AUTO    2.000%
SELLERS USE        FARM    1.500%
SELLERS USE        GENERAL    4.000%
SELLERS USE        MFG. MACHINE    1.500%

 

Code Explanations:

For City/County code explanations, click here.

Action Indicator: NT - New Tax; RC - Rate Change; AC - Agency Change

PJ Indicator: N - No tax levied in the police jurisdiction
                            Y - Tax levied in the PJ; normal rate is 1/2 the rate in corporate limits

Sales Tax W/D Fee: Automobile Demonstrator Fee - for automobile dealers only

LodgingsTax W/D Fee: No. of Room Nights - for lodging providers only

 

 

Motor Fuels Tax:

State tax rates with applicable Code of Alabama 1975 Sections:

Tax Type  Tax Rate  Code Section 
Gasoline  $.12 per gallon
$.04 per gallon
$.16 per gallon
  40-17-31
40-17-220
 
 
       
Motor Fuels
  $.13 per gallon
$.06 per gallon
$.19 per gallon
  40-17-2
40-17-220
 
        
Aviation Gas
Jet Fuel
  $.010 per gallon
$.030 per gallon
  40-17-31(d) 
        
Lubricating Oil  $.02 per gallon
$.04 per gallon
$.06 per gallon
  40-17-171
40-17-220
 
        
Wholesale Oil License  
1/2 of 1% on gross sales
for the preceding fiscal year*
 
*NOTE: This is levied on
the first wholesale
transaction in Alabama.
  40-17-174 
   

 

  

 

 

   

Seating Capacity

  

Tax Rate

Code Section

Motor Carrier Mileage  

Not less than nine (9) nor more than 16

Seventeen (17) thru twenty-one (21)

Twenty-two (22) thru twenty-five (25)

Greater than twenty-five (25)

  

$.025 per mile

$.005 per mile

$.075 per mile

$. 01 per mile

40-19-3

 

Source: www.revenue.alabama.gov/motorfuels/mfstaterates.html

 

Houston County Fuel Taxes:

LOCALITY      GASOLINE RATE      COUNTY    PJ      ADMINISTRATOR
Cottonwood  1 cent  Houston  N  Non-State Adm.
Houston County  1 cent  Houston  N  Non-State Adm.
Taylor  1 cent  Houston  N  Non-State Adm.

 


State Cigarette Tax:

42.5 cents/pack of 20

53.125 cents/pack of 25

 


Personal Income Taxes:

Tax Rate Range: Low - 2%; High - 50%

Income Brackets: *Lowest - $500; Highest - $3,000

Number of Brackets: Three

Personal Exemptions: Single - $1,500; Married - $3,000; Dependents - $300

Standard Deduction: Single - $2,000; Married filing joint return - $4,000

Medical/Dental Deduction: Limited to excess of 4% of adjusted gross income

 

Federal Income Tax Deduction: Full

Retirement Income Taxes: Social Security, military, civil service, state/local government and qualified private pensions are exempt. All out-of-state government pensions are tax-exempt if they are defined benefit plans.

 

Retired Military Pay: Pay and survivor benefits not taxed.

Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on Sept. 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on Sept. 24, 1975 - No tax; Not Member on Sept. 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.

VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes.

Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

 

An extensive list of exemptions are provided at www.revenue.alabama.gov/incometax/xempt.html.

 

Property Taxes:

Houston County collects 33 mills on property within a municipality and 28 mills for property in the rural area of Houston County. Homeowners can claim a homestead exemption at the Houston County Revenue Commissioner's office located at 462 N. Oats St., Fifth floor, Dothan, Ala. For additional information on homestead exemptions, maps of parcels in Houston County and other tax questions, call (334) 677-4714 or visit www.houstoncounty.org.

Each county has its own millage rate.

 

Inheritance and Estate Taxes:

There is no inheritance tax and the estate tax is limited to federal estate tax collection.

For further information, visit the the Alabama Department of Revenue website or call (334) 242-1170. If you are thinking about retiring to Alabama, click here.

*For joint returns, the taxes are twice the tax imposed on half the income.

 

Source: www.retirementliving.com/RLstate1.html