Halftime

We’re just over halfway through the 2025 regular session, and the Legislature is in it’s last week-long break to make halftime adjustments to their plans for the remaining weeks. Many of our watchlist bills have been pushed to the second half, when budgets will start to take center stage. Already, the House has signaled its willingness to let the overtime tax exemption expire by advancing a series of bills designed to lower grocery sales taxes and raise deductions on income tax.

 

1. Rep. David Faulkner’s HB163 (HB163-int.pdf) – The R&D deduction bill, retroactive to 2024, is expected to be in committee first week of April (the committee did not meet last week). We remain optimistic that this bill will advance and will update you along the way.

 

2. Sen. Clyde Chambliss’s SB174 (SB174-int.pdf) – No update from last week. 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 a non-resident employee working temporarily in Alabama can be exempt from withholding and paying Alabama income tax.

The Society is working with the Department of Revenue, Manufacture Alabama and other organizations to add compliance clarity, simplification and consistency among a greater number of states. We’d also like to add additional exemptions such as for trade shows, CPE and disaster relief workers. We believe our recommendations will improve compliance and create economic opportunities for the state without negatively impacting the state’s budget.

 

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. These bills have passed the House and will move to the Senate next week.

CLICK HERE FOR THE WATCHLIST

There have been 746 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.