I live in Alabama, work overseas. My company is based in Texas. I pay a 17% flat tax. Do I pay alabama tax?

Answer 1

Yes, you do...
My husband works for KBR as well and we payed quite a bit in taxes to Alabama before we relocated to VA. We have an excellent guy who does our taxes and I suggest that you at least contact him for info before filing yours! He specializes in ExPat and combat zone employee tax preparation!

http://www.palazzocpa.com/combat_zone.php

Answer 2

If you are based overseas permanently you should be paying the tax relevant to the country in which you are working, the exception is if you are resident in the US embassy, in which case that counts as DC.