I lived in Texas for almost 15 years before moving back home to Alabama. So when people tell me they're thinking about making the same move — usually for a job, sometimes for family, sometimes just because they're tired of the pace — I don't hand them brochure copy. I tell them what actually changed for me. Taxes Texas has no individual state income tax. Alabama does, with individual income tax rates ranging from 2% to 5%. So yes, you'll see state income tax on your paycheck