A Session on the Brink

In 1986, John Feinstein wrote a book chronicling a year of Indiana Basketball under Head Coach Bobby Knight titled A Season on the Brink.  Coach Knight was one of the more colorful masters of college basketball containing equal parts of knowledge, determination, insanity and dynamite.  His Indiana teams were always capable of winning the Final Four.  Their coach was also capable of flying off the rails at any moment.  From day to day, you just never knew what you were going to get.

Such was the 2026 Legislative Session.  Unfortunately, John Feinstein wasn’t around to take notes, and Netflix didn’t bring their cameras into the Statehouse (that I know of), but these last three months were nothing if not on the brink.  As was the case with a couple of Coach Knight’s Indiana teams, their accomplishments were legendary.  Let’s highlight a few of those:

1. Our “Pathways to CPA Act” PASSED in the first two weeks of session.  I hope everyone appreciates how quickly the Legislature moved in support of our profession and that bill.
2. HB17 - Lamb (HB17-int.pdf) – Municipal audit thresholds.  We think it is important to grant small municipalities some relief related to compliance/attest work.  The League of Municipalities and the Department of Examiners have been working with us.  That bill PASSED!  One note: If you are currently working with a small municipality (under $500,000 in annual expenditures), we have been informed by the Department of Examiners to begin applying the new thresholds immediately.  Please let me know if you have any questions.
3. HB250 – Garrett (HB250-int.pdf) & SB79 – Roberts (SB79-int.pdf) – Provides for conformity with certain aspects of the One Big Beautiful Bill Act.  That bill PASSED!
4. HB545 – Crow (HB545-eng.pdf) & SB365 – Hovey (SB365-int.pdf) – Allows for rounding to the nearest nickel.  Seems silly, but this is a good bill that is necessary.  That bill PASSED!
5. SB221 – Orr (SB221-int.pdf) – Excludes credit card transaction fees from being subjected to sales and use tax calculations.  As a refresher, the Alabama Department of Revenue created a rule that states businesses MUST charge sales tax on a credit card transaction fee levied on the consumer by a business if the underlying purchase was subject to sales tax.  These transaction fees are not contemplated in statute.  There are varying opinions on the tax implications of this bill passing.  I believe they are negligible. Others believe the impact could be millions.  That bill PASSED!
6. SB15 – Givhan (SB15-enr.pdf) – Creates a voluntary process for distressed organizations to liquidate assets and distribute proceeds to creditors.  We believe this could create an additional revenue stream for enterprising CPAs.  That bill PASSED!
7. HB527 – Lomax (HB527-enr.pdf) – This bill allows a state tax deduction of up to $1,000 of qualified overtime.  This bill also changes the standard deduction thresholds for state taxes AND creates a two-month moratorium on sales taxes for food groceries.  There’s a lot in this bill.  That bill PASSED!

If we’ve missed something or you have any questions, please do not hesitate to contact me at rpearson@alabama.cpa.

 

Your Alabama CPA Podcaster couldn’t follow through with regular updates this session, and for that I apologize.  As we continue to think through and act on how best to serve the membership, we still believe that it could be a great medium to utilize.  We’ll get that part figured out and get back to providing updates in the various ways you receive them.

 

It remains an honor to represent our profession in state and federal government matters.  I appreciate all you do to bring integrity and financial clarity to the taxpayers and constituents of this great state, and we want to continue to support and add value to your work.

 

CPAs remain the best.  Thank you again!