HB115 Alabama 2023 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Danny GarrettRepresentative
Republican
Session: Regular Session 2023
Title: Relating to individual income taxes; to amend Section 40-18-5, Code of Alabama 1975, to phase-in a reduction in the top tax rate from five percent to four and ninety-five hundredths percent.
Summary: HB115 would gradually reduce Alabama's top personal income tax rate from 5% to 4.95% through a multi-year phase-in, finishing in 2027-28 and continuing thereafter.
What This Bill Does
The bill amends Section 40-18-5 to implement a phased-down top tax rate for individuals while keeping the existing 2% and 4% brackets and their income thresholds. It stages the top rate as follows: 5% through tax year 2022-2023; 4.99% in 2023-2024; 4.98% in 2024-2025; 4.97% in 2025-2026; 4.96% in 2026-2027; and 4.95% for 2027-2028 and each year after. The brackets for the 2% and 4% rates remain based on the same income thresholds for single/head of family and for married filing jointly. The act becomes effective on the first day of the third month after it is passed and approved by the Governor (i.e., when it becomes law).

Who It Affects
All Alabama individual income taxpayers (filing single, head of family, or married filing jointly/separately) who pay the top tax rate; they would see a smaller top-rate portion of their tax over time as the rate drops.
Higher-income households whose taxable income places them in the top rate bracket (above $3,000 for singles/head of family or above $6,000 for married filing jointly) would directly benefit from the staged reductions in the top rate.

Key Provisions
Phase-in schedule for the top tax rate: 5% through tax year 2022-2023; 4.99% in 2023-2024; 4.98% in 2024-2025; 4.97% in 2025-2026; 4.96% in 2026-2027; 4.95% in 2027-2028 and thereafter.
Bracket structure unchanged: 2% on the first portion of taxable income (up to $500 for single/head of family; up to $1,000 for married filing jointly), 4% on the next band ($500 to $3,000 for single/head of family; $1,000 to $6,000 for married filing jointly), and 5% on income above these thresholds (top-rate portion).
Effective date: the act becomes effective on the first day of the third month after it is passed and approved by the Governor, or otherwise becomes law.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Taxation and revenue, individual income tax rate reduced