Report: Alabama taxes remain lowest, most regressive nationally
PARCA’s 2025 report finds Alabama collects less tax revenue, relies heavily on sales taxes and maintains a structurally imbalanced system.
income tax
Lawmakers to tackle tax relief bills upon return from spring break
HB386 would reduce the tax on groceries by an additional 1 percent as the state draws closer to eliminating the tax altogether.
Alabama residents might file their taxes for free in 2025 thanks to IRS program
Alabama will have to opt in for state residents to file tax returns through the IRS’ free Direct File program.
House bill passes to eliminate income tax on overtime pay
The bill would save employees 5 percent on overtime pay accumulated over the course of the year.
Alabama has the second-lowest tax revenue in the country
Only Tennessee had lower tax collections per capita, and that is excluding the state lottery, which would put Alabama dead last.
PARCA: Alabama second-lowest in state, local tax collection per capita
Meanwhile, the state had among the highest sales tax in the U.S.
State finance officials warn record-high revenues can’t be relied on
The state General Fund and Education Trust Fund saw historic revenues in 2021 due largely to federal pandemic assistance.
Alabama extends tax filing deadline to May 17
Interest will still accrue on payments made after April 15.
House committee advances COVID liability bill
The sponsor said the legislation would give businesses, churches, schools and others immunity from civil liability resulting from the COVID-19 crisis.
Bill to exempt COVID relief payments from Alabama income tax passes House
The bill would exclude COVID relief payments from Alabama's individual income tax.