Business Inventory Tax
Alabama does not have a business inventory tax.
Business Privilege Tax
The tax applies to all corporations, limited liability entities, including disregarded entities, which do business in Alabama or are organized under the laws of Alabama. The tax accrues as of January 1 of every taxable year and is due March 15.
Corporate Income Tax
Rate - 6.5%. Qualified taxpayers may elect alternative tax of 0.25% of gross sales in Alabama during the tax year.
Municipal Sales Tax
Applicable and assessed by some municipalities.
Personal Property Tax
First $1,000 - 2%
Next $5,000 - 4%
Over $6,000 - 5%
Ad Velorem/Property Taxes
All non-exempt property in Alabama is classified and assessed at 20% of fair and reasonable market value for manufacturers. The rate of tax per one thousand dollars of assessed value is $6.50 (includes $3.00 for schools). Local levies also apply.
State Sales and Use Tax
Base Rate: 4%
Machinery Rate: 1.5%
Reduced rates applicable for sales of machines and their parts used in mining, quarrying, processing, compounding and manufacturing.
Alabama's unemployment insurance tax rate for new employers is 2.7 percent for 3 years.
Special Licenses, Permits and Registrations
State law in Alabama requires that all businesses must obtain local business licenses. Alabama requires that many occupations also obtain special licenses before they can operate a business.