HB83 Alabama 2010 Session

Under existing individual income tax law, Alabama has relatively small allowances for both personal and dependent exemptions and also a low allowance for the optional standard deduction taken in lieu of itemized deductions. As a result of these low amounts, the state imposes individual income tax on a family of four beginning at $12,600 of Alabama adjusted gross income. If the below specified conditions occur, this bill would gradually increase the personal and dependent exemptions and raise the adjusted gross income phase-out of the optional standard deduction over a five-step period to increase the threshold at which the state imposes individual income tax. In the event that the growth in the Education Trust Fund equals or exceeds three percent (3%) annually as certified by the Department of Finance, this bill provides for the gradual increase in the personal and dependent exemptions, and raises the current phase-out amounts relative to the optional standard deduction over a five-step period in order to increase the threshold at which the state imposes individual income tax. However, no enhanced exemption or deduction amounts shall be allowed for those individuals with adjusted gross income in excess of $100,000

To amend Sections 40-18-15, 40-18-19, and 40-18-27 of the Code of Alabama 1975, to gradually increase the personal and dependent exemptions and raise the phase-out amount currently applicable to the optional standard deduction over a five-step period to increase the threshold at which the state imposes individual income tax. These increased exemptions and deductions shall occur only upon certified revenue growth in the Education Trust Fund.