Alabama Property Tax

Assessed Value fixed by Alabama Constitution

Amendment 373 of the Alabama Constitution provides that all real and personal business property will be assessed at 20% of its fair market value. That is, for property with a fair market value of $1,000,000, the assessed value would be $200,000 ($1,000,000 * 20%).  The combined state and local millage rate would then be applied to the assessed value.

Low Millage Rates

Section 214 of the Constitution limits the state millage rate on both real and personal property to 6.5 mills (3 mills for education, 1 mill for relief, and 2.5 mills for general uses). This rate is equivalent to a tax of $6.50 for every $1000 of assessed value.

However, both cities and counties may levy millage rates in addition to the state's 6.5 mills. These local rates vary, but the average rate statewide is 42 mills, including the  state's 6.5 mills. For real and personal business property with a fair market value of  $1,000,000 the average property tax would be only $8,400 ($1,000,000 * 20% * .042).  

Tax Abatements

The Tax Incentive Reform Act of 1992 (TIRA) allows qualified industries to receive abatements of non-educational property taxes for new businesses locating to Alabama, and for expansions of existing facilities in Alabama.