You can probably expect to pay
lower taxes in Alabama than in any other state in the nation.
Most retirement income is exempt from state taxation. Included are defined benefit plans
as defined under section 414(j) of the Internal Revenue Code, military retirement pay,
United States Civil Service Retirement System benefits, U.S. Government Retirement Fund
benefits, federal railroad retirement benefits, federal social security benefits,
disability retirement payments (and other benefits) paid by the Veteran's Administration,
United States Foreign Service Retirement and Disability Fund annuities and Tennessee
Valley Authority Pension Systems. Neither Blount County nor any of its municipalities
levies county, city, or town income taxes.
Alabama levies a 4 percent state sales tax. Blount County levies a 2 percent sales
tax. Some cities have an additional city sales tax. (For example, the combined sales tax
rate in Oneonta is 8 percent.)
Gasoline and Motor Fuels Tax
Each gallon of gasoline purchased in Alabama is taxed at 16 cents per gallon. Motor
fuel (diesel) is taxed at 17 cents per gallon. There is also a 2-cent per gallon
inspection fee imposed on both gasoline and motor fuels (diesel) that is administered by
the Department of Agriculture and industries. Local taxing authorities may also impose a
local gasoline or motor fuels tax. These rates vary.
Alabama does not have an inheritance tax but does have an estate tax. An estate left by a
deceased individual is subject to tax only if the estate exceeds the federal $600,000
value exemption. in addition, the next $60,000 is also exempt from Alabama tax.
Persons over age 65 may have all or a significant portion of their property (ad
valorem) tax on homestead waived on request. The state tax rate is 6.5 mills
(.0065) for both real and personal property. Blount County tax rate is 32.5 mills.
City mill rates vary with the maximum millage at 46 mills in Oneonta. "Real
property" refers to land and all things attached to it and "personal
property" refers to such property as automobiles, motor homes, and all property other
than real property that is used for business purposes. Home appliances and furnishings in
addition to personal items such as jewelry, etc. are not subject to Alabama property
taxes. Real and personal property is assessed on a ratio formula based on the use of the
property. As a homeowner over the age of 65, you are totally exempt from all state
ad valorem taxes. If your annual adjusted gross income is less than $12,000 or you are
retired due to a disability or blindness, you are entitled to an exemption of up to $5000
of assessed value for county tax. If you are totally disabled or have a federally
adjusted net taxable income of $7500 or less (spouse's income included), you are exempt
from all state, county. and city ad valorem tax on the homeowner's
principal residence and any property surrounding the homestead up to 160 acres. Alabama
has no real estate transfer tax.