Alabama Tax Climate Holds Steady

Date: November 15, 2017

Related Content: Analysis State Alabama Economy

Nothing has really changed about Alabama’s tax competitiveness in the past few years, according to the Tax Foundation’s 2018 State Business Tax Climate Index. Alabama has been ranked 35th in the nation for the third year in a row.

The annual index is designed to help business leaders, government policymakers, and taxpayers gauge how their state’s tax system compares to others.

“The evidence shows that states with the best tax systems will be the most competitive at attracting new businesses and most effective at generating economic and employment growth,” the study authors write. “It is true that taxes are but one factor in business decision-making. Other concerns also matter—such as access to raw materials or infrastructure or a skilled labor pool—but a simple, sensible tax system can positively impact business operations with regard to these resources. Furthermore, unlike changes to a state’s healthcare, transportation, or education systems, which can take decades to implement, changes to the tax code can quickly improve a state’s business climate.”

Here’s how Alabama ranked in all categories:

  • Overall: 35th
  • Corporate tax: 22nd
  • Individual income tax: 22nd
  • Sales tax rank: 49th
  • Unemployment insurance tax: 11th
  • Property tax: 12th


Neighboring Florida ranked 4th overall, Georgia ranked 36th, Mississippi ranked 24th, and Tennessee ranked 14th.

Related Content: Analysis | State | Alabama | Economy

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