SB348 Alabama 2011 Session

Summary

Primary Sponsor

Tammy Irons

Democrat

Co-Sponsors

Vivian Davis FiguresGeorge M. “Marc” KeaheyBobby D. SingletonPriscilla DunnLinda Coleman-MadisonRoger Bedford, Jr.Quinton RossHank SandersRodger SmithermanWilliam “Bill” M. BeasleyJerry L. Fielding

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

SB348 clarifies that Alabama resident individuals who own pass-through entities must include their entire allocable share of the entity’s income in their Alabama gross income.

What This Bill Does

If enacted, it amends Section 40-18-14 to make clear that resident owners of pass-through entities must include their full allocable share of the entity’s income in gross income for Alabama tax purposes. This applies to resident individuals who own entities taxed under subchapter K or C of the Internal Revenue Code. Nonresident individuals are not changed by this bill and continue to be taxed only on Alabama-sourced income. The act becomes effective immediately after the governor signs it into law.

Who It Affects

• Alabama resident individuals who own pass-through entities (such as partners in partnerships or owners of pass-through LLCs): their gross income for Alabama tax purposes would include their entire allocable share of the entity’s income.
• Nonresident individuals: their taxation remains unchanged and continues to be based only on income sourced in Alabama.

Key Provisions

• Amends Section 40-18-14 to clarify that resident individuals’ gross income includes the owner's entire allocable share of income from a pass-through entity.
• Specifically applies to resident owners of pass-through entities taxed under subchapter K or C of the Internal Revenue Code, making the full allocable share part of Alabama gross income rather than only Alabama-sourced income.
• Effective date: immediately following passage and governor approval (or when it becomes law otherwise).
• Nonresident taxation remains unchanged; the change affects only residents owning pass-through entities.

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

Subjects

Taxation