Sales Taxes

State Income Tax

State Sales Tax 4%
City Sales Tax 4%
County Sales Tax 1%

Married/File Joint
First $1,000 - 2%
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. ACCRA Cost of Living Calculator
  2. Bankrate Cost of Living Comparison (uses current ACCRA data)
  3. Relocation Essentials Cost of Living Comparison
  4. 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 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% 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 ALATAX
SELLERS USE FARM 0.750% 6-01-2009 AC N ALATAX
SELLERS USE GENERAL 4.000% 6-01-2009 RC N ALATAX
SELLERS USE MFG. MACHINE 0.750% 6-01-2009 AC N ALATAX
      
Sales Rates
Tax Type Rate Type Rate   
CONSUMERS USE Auto 2.000%   
CONSUMERS USE Farm 1.500%   
CONSUMERS USE General 4.000%   
CONSUMERS USE MGF. Machine 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% 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 OTHERS) 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

Source: www.revenue.alabama.gov/salestax/sales/index.cfm?Action=Detail

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. 

State tax rates with applicable Code of Alabama 1975 Sections:

Motor Fuels Tax:
Tax Type Rate Type 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 JET GAS
JET JUEL

$.010 PER GALLON
$.030 PER GALLON

40-17-31(d)  
LUBRICATING OILS $.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 FISCAL YEAR*

*NOTE: This is levied on the first wholesale transaction in Alabama.
40-17-174  
MOTOR CARRIER MILAGE

SEATING CAPACITY

TAX RATE CODE SECTION 
 

NOT LESS THAN 9 NOR MORE THAN 16
17 THRU 21
22 THUR 25 
GREATER THAN 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 Fuels Tax:
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 HIGH - $3000 
NUMBER OF BRACKETS 3  
PERSONAL EXEMPTIONS SINGLE $1,500 MARRIED $3,000 DEPENDENTS $300
STANDARD DEDUCTION SINGLE $2,000  MARRIED FILING JOINT $4,000
MEDICAL/DENTAL DEDUCTIONS LIMITED TO EXCESS OF 4% OF ADJUSTED INCOME

Federal Income Tax Beduction 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.

Each county has its own millage rate.

Property Taxes:

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

 

 

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