SB48 Alabama 2023 Session

Updated Feb 22, 2026

Summary

Primary Sponsor: Arthur OrrSenator
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: SB48 would phase in a gradual reduction of Alabama's top personal income tax rate from 5% to 4.95% by 2027, with corresponding bracket adjustments.
What This Bill Does
It changes how personal income tax is calculated for Alabama filers by keeping lower brackets and a top rate that declines each year. For single, head of family, or married filing separately filers, the tax is 2% on the first $500, 4% on income from $500 to $3,000, and 5% on income above $3,000, with the top rate stepping down from 5% in 2022 to 4.95% from 2027 onward. For married filing jointly filers, the tax is 2% on the first $1,000, 4% on income from $1,000 to $6,000, and 5% on income above $6,000, with the same year-by-year reductions to the top rate.

Who It Affects
Single, head of family, or married filing separately filers will see the top rate decline from 5% toward 4.95% by 2027, with bracket thresholds of $500 and $3,000.
Married filing jointly filers will see the top rate decline from 5% toward 4.95% by 2027, with bracket thresholds of $1,000 and $6,000.

Key Provisions
Amends Section 40-18-5 to phase in the top income tax rate reduction from 5% to 4.95% by 2027, with yearly steps: 5% (2022); 4.99% (2023); 4.98% (2024); 4.97% (2025); 4.96% (2026); 4.95% (2027+).
Maintains two lower brackets for each filing status: 2% up to $500/$1,000 and 4% on the amount above up to $3,000/$6,000, then 5% (top rate) on amounts above those thresholds, with the top rate stepping down as described.
Effective date: becomes law on the first day of the third month after passage and governor approval.

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