January 29, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Tax Foundation: Alabama Has Low Taxes for Established Businesses

February 29, 2012, 5:50 PM


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BIRMINGHAM, Ala. -- Alabama's low tax burden helped it rank as the 13th best state for established businesses and 19th best for new businesses, according to a Tax Foundation report released today.

Alabama has the second-lowest tax bill for a mature distribution center making its total tax rate 18.6 percent, according to the report "When It Comes to Business Taxes, Location Matters." Alabama had the fifth-lowest tax burden for a mature call center operation, a total effective tax rate of 14.5 percent.

For newly established businesses, Alabama ranked above-average for distribution centers, call centers and manufacturing operations. Montgomery's property taxes are among the lowest for the nearly 100 cities examined for the study. Manufacturing machinery is taxed at 3.58 percent in Montgomery and 4.25 percent in Birmingham, according to the Tax Foundation."

"Corporate taxes on the state level rarely treat all comers equally, leading to sometimes dramatic disparities in the cost of doing business," Tax Foundation President Scott Hodge said in a release.

Wyoming ranked as the best state overall for mature firms, with South Dakota, Georgia, Nevada and Ohio rounding out the top five. Pennsylvania came in last in 50th place.

In the report, the Tax Foundation examined each state's tax system, comparing how different the tax burden is for a retail store compared to a corporate headquarters, manufacturing plant, or research and development facility. 

The Tax Foundation is a nonpartisan organization that has monitored fiscal policy at the federal, state and local levels since 1937.

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