The legislature enjoyed its first of two spring breaks last week, which gave us time to catch our breath and gear up for another exciting week of legislative sausage-making. We expect they’ll try to pack a lot into these next three session days before they take off again next week.

1. Rep. David Faulkner’s HB163 (HB163-int.pdf) –We are hopeful Chairman Arthur Orr will place it on his committee’s agenda upon their return from break. To recap, this bill would allow R&D expenditures to be fully deductible for Alabama income tax purposes, retroactive to January 1, 2024. The timing of the bill (post-March 15) isn’t ideal, but we still think it is worth supporting. Sen. Dan Roberts has agreed to carry the bill in the Senate.
2. Sen. Clyde Chambliss’s SB174 (SB174-int.pdf) - The business and municipality community has built a solid consensus around this bill in a way that gives it a great chance of passing. Currently, unfair business license taxes require taxpayers to appeal to the circuit court in the jurisdiction of the taxing agency. The ability to file these appeals with the Alabama Tax Tribunal saves taxpayers time and money. We are advocating for the passage of this bill.
3. Rep. Danny Garrett’s HB379 (HB379-int.pdf) – Creates conditions under which an Alabama non-resident employee can be exempt from withholding and paying state income tax. We believe simplifying compliance with state income tax regulations create greater compliance. We will keep you updated as it progresses.
4. Chairman Garrett’s HB386-389 (HB386-int.pdf, HB387-int.pdf, HB388-int.pdf, HB389-int.pdf) – This series of bills would make permanent tax-reductions to grocery sales taxes, increases the optional standard deduction for income taxes, and increases the tax exemption for taxable retirement income. We believe these bills set the stage for the overtime income tax exemption to expire on June 30th. These bills have cleared Chairman Garrett’s Ways and Means – Education committee and will likely be considered on the House floor this week.

There have been 652 bills filed as of this weekend. The bills in their entirety can be found at https://alison.legislature.state.al.us and, if you have any additional questions or comments, please reach out to me at rpearson@alabama.cpa.