Taxes in Daphne
Alabama's near-flat 5% income tax and Daphne's 9.5% combined sales tax apply to Daphne residents, layered with Baldwin County's genuinely low property tax rate (~0.31% effective, shared with Fairhope and the rest of the county).
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Learn moreAlabama's graduated income tax -- restated as place-level context
Alabama applies a graduated state income tax: 2%/4%/5%, with the top 5% rate starting at just $3,000 taxable income (single) / $6,000 (MFJ) -- effectively near-flat for most earners. Alabama's real, uncapped federal-income-tax-deduction provision (one of only three states offering it) partially offsets this. This applies identically to every Alabama market in this project.
Daphne's 9.5% combined sales tax
Daphne's minimum combined 2026 sales tax rate is 9.5%: 4% Alabama state + 3% Baldwin County + 2.5% City of Daphne -- half a percentage point above neighboring Fairhope's 9.0% (2% city rate), a real, disclosed intra-county difference.
Property tax: a genuine, shared county advantage
Baldwin County's property tax rate runs roughly 0.31% effective, among the lowest of any county in the US -- shared identically across Daphne, Fairhope, and the rest of the county. A Daphne-specific home's actual bill depends on its own assessed value.
No state estate or inheritance tax
Alabama levies no state estate tax or inheritance tax. Confirm current guidance directly for any actual estate-planning decision, since sufficiently large estates may still owe the federal estate tax.
Key takeaways
- Alabama's graduated income tax runs near-flat 5% for most earners, partially offset by the state's real federal-tax-deduction provision.
- Daphne's 9.5% combined sales tax runs a half-point above neighboring Fairhope's 9.0%.
- Baldwin County's property tax rate (~0.31% effective) is a genuine, shared advantage across the county.
- Alabama levies no state estate or inheritance tax, though the federal estate tax can still apply to sufficiently large estates.
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