Hi, I'm a resident of Texas, a non income tax state. In 2007 I sold some property in Alabama & they claim I owe them taxes on the gains. I'm employed by a firm in ky, an income tax state, but being a tx resident my wages are not taxed by ky. As a non-resident of al can they legally assess my gains? Thanks, noboat

Since the property is in AL, they can tax you for gains because the gains are from an AL source. See the instructions for schedule D of their Form 40NR (for non-residents):
http://www.revenue.alabama.gov/incometax/2007_forms/07f40nrbk.pdf

The gain or profit from any sale, exchange, or
other disposition by a nonresident of real or tangible
property located in Alabama is taxable even though
it is not connected with a business carried on in this
State.