For whom the sine die tolls

We are pleased to report that our priority bills have passed the legislature!

 

Ahead of the lone remaining session day, we consider this legislative session to have been a success.  This would not have been possble without support from our members and friends that put us in position to advocate for CPAs in both public and private practice.

 

There are still a couple bills on our watchlist remaining to be passed on the final session day.  We will update you on those next week and give our eulogy on the 2025 session.

 

Details on the status of our priority bills:

 

1. Rep. David Faulkner’s HB163 (HB163-enr.pdf) – This bill has PASSED the legislature and now awaits Governor Ivey’s signature.  We are pleased with the passage of this bill. This bill allows Alabama companies to deduct R&D costs in the year they are expended, decoupling from the Federal TCJA requirement to amortize them over 5 years.  Once signed by the Governor, companies may apply this change retroactive to January 1, 2024.

 

2. Sen. Clyde Chambliss’s SB174 (SB174-enr.pdf) – This bill has PASSED the legislature and now awaits Governor Ivey’s signature. 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 pleased with the passage of this bill.

 

3. Rep. Danny Garrett’s HB379 (HB379-enr.pdf) – This bill has PASSED the legislature and now awaits Governor Ivey’s signature.  We are pleased with the passage of this bill. This bill creates conditions under which a non-resident employee working temporarily in Alabama can be exempt from withholding and paying Alabama income tax, mirroring a model act being passed in similar states as proposed by the Council on State Taxation.  We appreciate Bruce Ely with Bradley Arant, Manufacture Alabama and BCA for joining us in this effort.

 

4. Rep. Terri Collins’s HB365 (HB365-enr.pdf) – This bill has PASSED the legislature and now awaits Governor Ivey’s signature.  We are pleased with the passage of this bill. The bill creates the Alabama STEM Council within the Department of Workforce to advise State Government on ways to improve STEM-related education, awareness and workforce development.  It is notable that accounting is listed as STEM profession in this bill.  The ASCPA and the State of Alabama is proud to join the AICPA in the national effort for accounting to be included as a STEM profession.

5. Chairman Garrett’s HB386-389  – 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.  Prior to receiving favorable reports from the Senate’s Finance  Taxation – Education Committee, these bills received some remodeling.

• HB386-enr.pdf has passed the legislature, and calls for a 1% reduction in sales and use taxes on groceries (to 2%) beginning September 1, 2025.  
• HB387 was substituted for a bill that would lower the “machine & equipment” sales tax rate from 1.5% to 1.25%.  This bill will require passage in the Senate and concurrance in the House on the final session day.
• HB388 was originally set to increase the state’s exemption for taxable retirement benefits from $6,000 to $12,000 as of January 1, 2026.  This Committee amendment will phase in the increase over three years.  As amended, the exempted amount will be $8,000 in 2026, $10,000 in 2027 and $12,000 in 2028.  This bill will require passage in the Senate and concurrance in the House on the final session day.
• HB389 would increase the state’s standard deduction.  This bill will require passage in the Senate on the final session day.

6. Rep. Chris Sells’ HB505 (HB505-enr.pdf) – This bill has PASSED the legislature and now awaits Governor Ivey’s signature.  We are pleased with the passage of this bill.

This bill would increase the amount of time a taxpayer may appeal a final assessment to the Alabama Tax Tribunal or circuit court from 30 days to 60 days.  It also provides pay scale adjustments for Tax Tribunal judges.

CLICK HERE FOR THE WATCHLIST

There have been 968 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.