Is eliminating state income tax a possibility in Alabama?

BIRMINGHAM, Ala. (WIAT) — One of Alabama’s border states, Georgia, is considering dropping its state income tax.

Tennessee and Florida have already eliminated their income taxes. Is that a future possibility for Alabama?

State lawmakers on both sides of the aisle said it’s a slim chance that Alabama gets rid of the state income tax.

“When we removed the overtime tax credit that we was getting on overtime pay that ended June 30, the state of Alabama said they were losing $230 million just from overtime pay,” state Rep. Curtis Travis, D-Tuscaloosa. “You can imagine what it would be like if we eliminated income tax and didn’t fill it back in from somewhere. We already operate at a standpoint where we don’t have enough revenue. and so to do that I think would be very hard to do.”

“Alabama, we’ve got a different tax structure that has evolved over the last century,” said state Rep. Ron Bolton, R-Northport. “Now, some of our neighboring states don’t have an income tax but they’ve got much higher property taxes and higher sales tax rates. Like Tennessee and Florida, they live off of tourism dollars also, but Alabama doesn’t have the luxury of doing that.”

While some taxpayers think it would be nice to see income tax eliminated, others aren’t so sure it would save money in the end.

“I’d like to see income tax at least get cut some,” Trussville resident Tony Green said.

“How do we replace the revenue?” asked Paul Parish from Winfield.

Revenue replacement is a big question surrounding the elimination of state income tax. Parish says he isn’t sure where the replacement would be pulled from.

“They would have to find some other source,” Parish said.

Some taxpayers think even if not eliminating income tax, there are other ways the government could save people money.

“They could cut down some on the gas tax,” Green said. “They just went down on the grocery tax, but they could probably go down some more on that. People work hard for their money and with everything going up — even when you get a raise, everybody else jacks their prices up — so you really don’t get a raise.”

Nine states do not have a state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.