Income Exempt From State Tax

Naturally said:
Did my taxes last night and a thought crossed my mind ... that I can't wrap my head around.

First of all, here in Alabama, all my income is exempt from state taxes. I even contacted the Alabama Department of Revenue and asked if I needed to file an Alabama Tax Return each year. The answer was, "No you don't. Your income sources are exempt from Alabama state tax."

Not only that, but a part of my income which is disability from the Veterans Administration (VA) is also exempt from Federal Taxes. My income is from Social Security, Retired Military Pay and the VA.

So here is what was on my mind ... When we purchase something, there are no Federal Taxes on the purchase, yet when we purchase something, here in Alabama, we pay State Sales Tax.

The thing is why do I have to pay state taxes on something I buy, when the money used to purchase the items is state tax exempt ??
In the eyes of the Alabama State Tax Laws, that money "doesn't exist". Yet when I spend it, it's taxed.
I'm thinking maybe I need a tax exempt number or something that I can provide to vendors when purchasing something.
Seems like something I should be entitled to, if the money I have is state tax exempt to begin with.
I guess as long as I keep the money and don't buy anything ever, I don't have to pay state taxes on the income :unsure:
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Are you maybe mixing income tax and sales tax? Here in Florida, we don't pay a state income tax but we do pay sales tax and property tax.
 

Yep, that was what I was doing @Rich
Was wondering why I pay sales tax when using money that is income tax exempt.
Both those taxes go to the state. Guess they forgive one but not the other.
Just thankful the income is state income tax exempt.
 
New Hampshire has no income tax, no sales tax, and property taxes in my area are reasonable. We consistently rank within the top 5 in the nation for quality of public education.

This state has a habit of NOT electing people who find personal fulfillment in spending other people's money. :)
 

That's just the way it is. It's great that your entire income is exempt from state taxes. Take that as a win. Most of my pension and all of my SS is exempt from state taxes. Here in N.J. our sales tax is 6.625% on items other than clothing, most food items, toilet paper and paper towels, OTC and RX medications, to name a few.
 
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