Sales tax is simply a fact in Alabama. The residents here are used to it; everything is almost 10% more than the advertised price. In many cities in Alabama it is more than 10%. But in most other states, the sales tax isn’t nearly as high.
When it comes to sales tax at the local level — within cities and counties — Alabama has the highest rates in the nation.
The average sales tax in Alabama cities, towns, and counties is 5.25%. The closest state – Louisiana – has an average local sales tax rate of 5.1%. These are the only two states where the average local sales tax is over 5%.
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That’s according to 2023 data from The Tax Foundation, an independent nonprofit tax policy based in Washington, DC
Alabama’s state sales tax rate is just 4% — actually one of the lowest in the US. And many other tax rates are low here, too, including property taxes, where Alabama ranks 49th out of 50 states and Washington, DC
Alabama’s state sales tax rate of 4% is the seventh lowest in the country, but its high average local tax rate means that the combined sales tax — or local sales tax plus state sales tax — is 9.25%. That’s the fourth highest combined rate in the nation.
The local sales tax rate calculated by The Tax Foundation is a population-weighted average of the cities and counties in each state. Within Alabama, the local tax rate varies widely.
The city with the highest combined sales tax rate in Alabama is Arabic, according to the Sales Tax Handbook. This is a city in northern Alabama where the combined sales tax rate is 12.5%. That’s the fourth highest combined tax rate of any city in the United States.
For the complete list of combined sales tax rates in each city in Alabama, see the Sales Tax Handbook as of 2023 in the list below.
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Have an idea for a data story about Alabama? Email Ramsey Archibald at [email protected]and follow him on Twitter @Ramsey Archibald. Read more data stories from Alabama Here.
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