HB241 Alabama 2011 Session

Summary

Primary Sponsor

John F. Knight Jr

Democrat

Co-Sponsors

Johnny Mack MorrowJoe HubbardRichard J. LairdGeorge “Tootie” BandyMike HubbardNapoleon BracyBerry ForteDavid ColstonDarrio MeltonGreg BurdineDexter GrimsleyPatricia ToddJohn RobinsonArtis McCampbellBarbara Bigsby BoydJoseph C. MitchellDemetrius C. NewtonPebblin W. WarrenRalph HowardThad McClammyChris EnglandOliver RobinsonMary MooreMerika ColemanJuandalynn Givan

Session

Regular Session 2011

Title

Income tax, Alabama resident individuals, gross income includes an owner's entire allocable share of income earned from both in-state and out-of-state sources, Sec. 40-18-14 am'd.

Summary

HB241 would require Alabama resident individuals who own pass-through entities to include their full allocable share of the entity’s income in their gross income for Alabama income tax.

What This Bill Does

It amends the definition of gross income to require resident individuals to include the entire allocable share of a pass-through entity’s income, even if part of it comes from outside Alabama. This means residents’ gross income could reflect income from all sources of the entity, not just Alabama-based income. The bill keeps nonresident taxation as is (taxed only on Alabama-sourced income) and becomes effective immediately upon passage.

Who It Affects

• Alabama resident individuals who own pass-through entities: their gross income would include their full share of the entity’s income, even if some income comes from outside Alabama.
• Nonresident individuals: continue to be taxed only on income from Alabama sources; the change mainly affects residents.

Key Provisions

• Amends Section 40-18-14 to require resident individuals to include their entire allocable share of income from pass-through entities in gross income.
• For resident taxpayers who own pass-through entities taxed under Subchapter K or C, their full allocable share is included in gross income and is not limited to Alabama-source income.
• The act becomes effective immediately upon passage and approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation