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Handbook

The Alabama Tax and Budget Handbook


Cover image of The Alabama Tax and Budget Handbook

We’re all in this together. All of us – people of every race, gender, age, income and background – benefit from a network of services from our local, state and national governments. From garbage collection to fire protection, from roads to schools, from public health to public safety, our tax dollars support the daily upkeep of our common good across Alabama.

The Alabama Tax and Budget Handbook is a guide to help make our state’s tax and budget processes more accessible and understandable. The handbook provides an overview of state finances and answers questions that affect every Alabamian: What do our tax dollars pay for? How does state spending work? Where does the state get its money?

The handbook looks at how those functions measure up – in relation to residents’ needs and abilities, in fairness and equity for all residents, and in comparison to the performance of other states. And the handbook offers ideas for making Alabama’s finances fairer, simpler, more adequate for meeting our needs and more easily communicated to the public.

By learning about these processes and advocating for positive change, Alabamians can require their policymakers to be responsive to the needs in our communities. Together, we can ensure a government that gives everyone a voice, an economy that offers everyone a chance to get ahead, and an Alabama that works for all of us.

Read the handbook

Use the links in the table of contents below to navigate through the full online version of The Alabama Tax and Budget Handbook. This navigation also will be available at the bottom of each section page.

For an overview of the handbook’s major themes and key recommendations, read our news release here.

To read the full handbook, download a PDF copy here. You also can access the PDF by clicking the “Download” button at the top of this page.

Order a print copy of the handbook

You can request print copies of the handbook, and we hope you do! Print copies are available free of charge, but we do ask you to consider a donation to help us cover printing and distribution costs.

• If you are able to donate for a print copy, you can make your request and donation in one place on this form.

• To request a print copy at no cost, please fill out this form.

About this handbook

Alabama Arise published the first edition of The Alabama Tax and Budget Handbook in 2005 to help educate the public about how our state’s taxes and budgets work and how they affect our everyday lives. Arise published a second edition in 2015 and now a third edition in 2026. This third edition includes changes that have occurred in the decade since the previous edition – and reflects our ongoing commitment to building a better Alabama for all.

This handbook concludes with a glossary of terms commonly encountered in tax and budget debates. Hyperlinked terms that appear in boldface type throughout the handbook are defined in the Alabama Tax and Budget Glossary.

To request a presentation about this handbook’s contents, email info@alarise.org or call the Alabama Arise office at 334-832-9060.

Table of contents

Section 2: Budget Overview

Section 3: Tax Overview

Section 4: Income Tax

Section 5: Sales Taxes

Section 6: Property Taxes

Section 7: Business Taxes

Section 8: Tax Policy Solutions for the Long Haul

Section 9: Alabama Tax and Budget Glossary

Acknowledgments

The Alabama Tax and Budget Handbook is an Alabama Arise publication made possible by generous support from Arise’s members. The findings and recommendations presented in this report are those of Alabama Arise and do not necessarily reflect the opinions of any other organization or person.

AUTHORS:

Carol Gundlach
Senior policy analyst
Alabama Arise

Chris Sanders
Communications director
Alabama Arise

Jilisa Milton
State policy fellow, 2021-22
Alabama Arise

Mike Nicholson
Senior policy analyst, 2023-25
Alabama Arise

Jim Carnes
Policy director, 2012-22
Alabama Arise

Kimble Forrister
Executive director, 1991-2018
Alabama Arise

EDITORS:

Chris Sanders
Communications director
Alabama Arise

Robyn Hyden
Executive director
Alabama Arise

Akiesha Anderson
Policy and advocacy director, 2022-24
Alabama Arise

Will Nevin, Ph.D.
Assistant professor and program coordinator for Communications Media
Alabama A&M University

RESEARCH SUPPORT:

Courtney Mathis
Summer legal fellow, 2023-24
Alabama Arise

WEB DESIGN:

Matt Okarmus
Senior communications associate
Alabama Arise

PHOTOGRAPHY:

Whit Sides
Storyteller
Alabama Arise

Julie Bennett
Auburn, Ala.

PRINT AND GRAPHIC DESIGN:

Tori LaConsay
Atlanta, Ga.

SPECIAL THANKS FOR ADVICE AND ASSISTANCE:

Alabama League of Municipalities
Montgomery, Ala.

Center on Budget and Policy Priorities
Washington, D.C.

Institute on Taxation and Economic Policy
Washington, D.C.

Conner Bailey, Ph.D.
Professor emeritus
Auburn University

Ryan Thomson, Ph.D.
Assistant professor
Auburn University