SB425 Alabama 2011 Session

Summary

Primary Sponsor

Del Marsh

Republican

Session

Regular Session 2011

Title

Partnerships and limited liability companies, Subchapter K entities and Alabama S corporations, owners and resident beneficiaries of estates or trusts provided a proportionate tax credit for taxes paid to a foreign country, Secs. 40-18-14, 40-18-21 am'd.

Description

This bill would modify the definition of gross income for Alabama income tax purposes and supersedes inconsistent Department of Revenue rules so that resident individuals, who are either partners or members of partnerships or limited liability companies, shareholders of Alabama S corporations, or beneficiaries of estates or trusts, during all or part of a tax year, must include their proportionate share of income from the pass-through entity, regardless of whether the income is earned within or outside of Alabama. This bill would provide resident individuals who are owners or beneficiaries of these pass-through entities an income tax credit for the income tax paid by the entity to other states or territories on behalf of the individual owner or beneficiaries because the other state imposes a withholding or composite return obligation or an entity-level tax on the pass-through entity.

This bill would also provide an income tax credit to resident individuals who are owners or beneficiaries of these pass-through entities for the amount of net income-based taxes paid by the pass-through entity to foreign countries.

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Subjects

Taxation