Alabama State Tax Laws
- Alabama has one of the lowest tax rates in the United States.Carte Etats Unis Camaieu Rose image by Aimohy from Fotolia.com
Alabama has one of the lowest state tax rates in the United States, according to the Alabama Department of Revenue. State income tax laws outline how much tax you can expect to pay on your property and income, as well as your standard deduction and dependent exemptions. - Alabama law sets several tax rates for property. Most property is taxed at a rate of 20 percent of its fair market value; however, agricultural and historical property is taxed at 10 percent of its fair market value, personal automobiles are taxed at 15 percent, and property of utility companies used for business purposes is taxed at 30 percent. Fair market value refers to the value of an item at the current time, taking the age of the item into account.
Income tax rates vary from 2 to 5 percent of a person's income, depending on how much money you make in a year. - Alabama requires all people who make more than $5,250 in a year to file income taxes. If a married couple files taxes jointly, the couple must file if both spouses together make more than $10,500. The standard deduction on Alabama income taxes is $2,000 for a single person and $7,500 for each partner in a married couple filing a joint tax return.
- Alabama allows you to take a $1,500 personal exemption for you and/or your spouse. You can take an exemption of $300 to $1,000 for each dependent, based on the dependent's age and relationship to you. Alabama does not allow foster parents to claim foster children as dependents on their state tax return. You cannot claim your spouse as a dependent.
