Dothan Chamber

State Sales Tax - 4%

City - 4%

County - 1%

Total Sales Tax - 9%

State Income Tax:

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 31 mills x 10% 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 2006, 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 8.8%, as opposed to the U.S. average of 10.6%. Alabama tax burden per capita was $2,881 as compared to the U.S. average of $4,072. Source: www.retirementliving.com/RLtaxburdens.html .

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

A cost of living comparator allows quick cost of living comparisons between communities; two links are provided:

Taxes:

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

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

Sales Taxes:

State sales tax is 4%; prescription drugs exempt. The rate can go as high as 12.0% 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 http://www.revenue.alabama.gov/salestax/sales/index.cfm?Action=Search.

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

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

Current Tax Rates as of the April 1, 2007:

Tax Type

Rate Type

Rate

Active Date

Action

Administrator

CONSUMERS USE

AUTO

.750%

09-01-1996

ALATX

CONSUMERS USE

FARM

.750%

09-01-1996

ALATX

CONSUMERS USE

GENERAL

4.000%

01-01-2007

ALATX

CONSUMERS USE

MFG. MACHINE

.750%

09-01-1996

ALATX

LODGINGS

GENERAL

6.000%

01-01-2005

ALATX

SALES TAX

AUTO

.750%

09-01-1996

ALATX

SALES TAX

FARM

.750%

09-01-1996

ALATX

SALES TAX

GENERAL

4.000%

01-01-2007

ALATX

SALES TAX

MFG. MACHINE

.750%

09-01-1996

ALATX

SALES TAX

VENDING

3.000%

09-01-1996

ALATX

SALES TAX

W/D FEE

$3.750

09-01-1996

ALATX

SELLERS USE

AUTO

.750%

09-01-1996

ALATX

SELLERS USE

FARM

.750%

09-01-1996

ALATX

SELLERS USE

GENERAL

4.000%

01-01-2007

ALATX

SELLERS USE

MFG. MACHINE

.750%

09-01-1996

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

Motor Fuels Tax:

State tax rates (Source: Ador web site) 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 4017-220
Aviation Gas Jet Fuel	$.024 per gallon $.008 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
Motor Carrier Mileage	Seating Capacity	Tax Rate	40-19-3
	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

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.

Cigarette Tax:

42.5 cents/pack of 20

53.125 cents/pack of 25

Personal Income Taxes:

Tax Rate Range: Low - 2.0%; High - 5.0%

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

Number of Brackets: 3

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 September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 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 http://www.revenue.alabama.gov/incometax/xempt.html.

Property Taxes:

The state does not collect taxes on personal property such as boats and computers. Its ad valorem (property tax) is 6.5 mills. Each county has its own millage rate. Homeowners 65 and older are exempt from all county property taxes. Some cities also assess separate property taxes. A homestead exemption up to $5,000 of assessed value is granted by the state on real property taxes. A larger exemption is available to persons over 65. Visit state's property tax division web site.

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 Alabama Alabama Department of Revenue or call (334) 242-1000.

*For joint returns, the taxes are twice the tax imposed on half the income. Source: https://www.retirementliving.com/RLstate1.html.