SB12 Alabama 2010 Session

Summary

Primary Sponsor

Zeb Little

Democrat

Session

Regular Session 2010

Title

Revenue Department, income tax refunds, payment within certain period of receipt of tax return, computation of interest, Sec. 40-1-44 am'd.

Summary

SB12 would require the Department of Revenue to issue income tax refunds within 30 days of receiving a return and to apply a defined interest rate to overpayments, with some refunds exempt from interest.

What This Bill Does

If enacted, the Department of Revenue must refund any income tax overpayment within 30 days after it receives the return. Interest on overpayments would be calculated using the federal underpayment rate (as set under 26 U.S.C. § 6621) and would usually start from the date of the overpayment to the department. Some refunds would not earn interest, including certain refunds for specific taxes listed in the bill. The act also sets timing rules for interest related to withholding and estimated taxes and would take effect immediately after Governor approval.

Who It Affects

• Individuals and businesses that file Alabama income tax returns would likely see faster refunds and may earn interest on overpayments under the new rules.
• The Alabama Department of Revenue, which would implement and administer the new refund timing and interest rules.
• Taxpayers receiving refunds for certain taxes (e.g., license taxes, certain gasoline taxes, tobacco taxes, and specific motor fuels refunds) who would not receive interest under the bill.
• Taxpayers with net operating losses or carrybacks, and those with withholding or estimated tax refunds, who have special rules about when interest starts.

Key Provisions

• Refunds of income tax overpayments within 30 days after receipt of the return.
• Interest on overpayments computed at the underpayment rate established by the Secretary of the Treasury under 26 U.S.C. § 6621, starting from the date of the overpayment to the department.
• No interest paid on certain refunds for specific taxes (e.g., license taxes, certain gasoline taxes, tobacco taxes, and specific motor fuels refunds under defined conditions).
• Interest timelines for refunds related to withholding and estimated taxes, with specified start dates (dependent on due dates or filing).
• Special rules for net operating loss carryovers/carrybacks, where interest starts when the refund claim is filed.
• Effective date: the act becomes effective immediately after Governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Revenue Department