Birmingham, AL Taxes 2025
Complete local tax guide and OBBBA calculator
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Birmingham Tax Overview 2025
Alabama's largest city with local occupational tax. Very affordable.
Local Income Tax
1%
City/county rate
Sales Tax
10.00%
State + local
Property Tax
0.62%
Effective rate
Median Home
$120,000
Home value
State Tax Information
Birmingham is located in Alabama (2% - 5% state income tax)
💼 Birmingham Local Income Tax
Birmingham imposes a local income tax of 1% on residents. This is in addition to any state income tax you may owe to Alabama.
Local income taxes are common in Ohio, Pennsylvania, and a few other states. They're typically withheld from your paycheck if you work in Birmingham, regardless of where you live.
Total Income Tax Burden in Birmingham
🛒 Birmingham Sales Tax 2025
The combined sales tax rate in Birmingham is 10.00%. This includes both the Alabama sales tax and any local sales taxes.
Sales tax applies to most retail purchases in Birmingham. Some items like groceries, prescription medications, and clothing may be exempt or taxed at reduced rates depending on Alabama law.
Sales Tax Breakdown
Sales Tax Examples
| Purchase Amount | Sales Tax | Total |
|---|---|---|
| $50 | $5.00 | $55.00 |
| $100 | $10.00 | $110.00 |
| $500 | $50.00 | $550.00 |
| $1,000 | $100.00 | $1,100.00 |
🏠 Birmingham Property Tax 2025
The average effective property tax rate in Birmingham is 0.62%. Based on the median home value of $120,000, the typical homeowner pays approximately $744 per year in property taxes.
Property taxes fund local services including schools, police, fire departments, roads, and parks. Rates vary by specific location within Birmingham based on school district and other taxing authorities.
Estimated Annual Property Tax in Birmingham
| Home Value | Annual Tax | Monthly | SALT Deductible? |
|---|---|---|---|
| $200,000 | $1,240 | $103 | ✓ Yes |
| $300,000 | $1,860 | $155 | ✓ Yes |
| $400,000 | $2,480 | $207 | ✓ Yes |
| $500,000 | $3,100 | $258 | ✓ Yes |
| $750,000 | $4,650 | $388 | ✓ Yes |
| $1,000,000 | $6,200 | $517 | ✓ Yes |
💡 SALT Tip: Under the OBBBA, you can deduct up to $40,000 in state and local taxes (SALT) on your federal return. This includes property taxes, state income taxes, and local income taxes.
💰 Birmingham Cost of Living
Housing Costs
Tax Summary
OBBBA Tax Benefits for Birmingham Residents
Local income tax makes OBBBA federal deductions more valuable.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several federal tax deductions that can significantly reduce your tax burden as a Birmingham resident.
Available OBBBA Deductions:
Calculate Your Birmingham Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Birmingham resident.
Calculate My SavingsFrequently Asked Questions
What is the sales tax in Birmingham?
The combined sales tax rate in Birmingham is 10.00%. This includes both state and local sales taxes.
Does Birmingham have a local income tax?
Birmingham has a local income tax of 1%. This is in addition to any state and federal income taxes.
What is the property tax rate in Birmingham?
The average effective property tax rate in Birmingham is 0.62%. On a home worth $120,000, you'd pay approximately $744 per year.
How do OBBBA deductions benefit Birmingham residents?
Local income tax makes OBBBA federal deductions more valuable. You can use our free calculator to estimate your total savings from tips, overtime, auto loan interest, SALT, and senior bonus deductions.