Alabama
Our ranking: Tax-friendly
State income tax: 2% (on up to $1,000 of taxable income for married joint filers and up to $500 for all others) — 5% (on more than $6,000 of taxable income for married joint filers and more than $3,000 for all others)
Average state and local sales taxes: 9.15%
Gas taxes and fees: 21 cents per gallon
It doesn’t take much income to find yourself in Alabama’s highest tax bracket, though the Yellowhammer State does allow you to deduct your federal income taxes (it’s one of just of a handful of states with this break). Some counties and cities charge an “municipal occupational tax” of 0.5%-2% on income; the average levy across the state is 0.5%, according to the Tax Foundation.
Property taxes are the second-lowest in the country, but sales taxes take a bite — and the full rate is levied on food.
