Study: Alabama’s property tax administration a confusing mess


FAIR TAX? Alabama’s property taxes are low, but they may not be very fairly or efficiently administrated, a study argues.

By Johnny Kampis |

CULLMAN, Ala. — Alabama may have one of the lowest property tax rates in the nation, but one study argues the state’s administration of those taxes isn’t fair or efficient.

The Council on State Taxation, a Washington, D.C.-based nonprofit trade association comprised of hundreds of multistate corporations, recently graded all 50 states and several countries on a number of tax administrative practices, including transparency, simplicity, consistency and fairness.

Alabama merited a C-minus, tied for eighth worst in the United States.

Why the low score? You can attribute it to a multitude of factors:

  • Alabama taxpayers are only sent property tax evaluation notices if the value of their property increases, with no notice on how to appeal an evaluation.
  • Ratios and caps vary widely by property type. The study noted the effective tax rate on commercial and industrial property was more than double the rate on residential property in Birmingham.
  • Relevant property tax forms vary within individual counties and are often only available on those counties’ websites.
  • The state lacks central oversight: the county board of equalization fixes the value of all property on assessors’ lists, while the Alabama Department of Revenue advises assessors.

Liz Malm, a policy analyst with the Tax Foundation, a nonpartisan tax research group, wrote on the organization’s blog that while the amount of property taxes is important, “the manner in which we pay them” shouldn’t be overlooked.

“Well administered taxes encourage voluntary compliance, and simple and transparent tax codes are something all states should strive for,” she wrote.

Oregon was the highest-scoring state, with a B, while Pennsylvania was the worst, getting a D.