HB21 Alabama 2015 2nd Special Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Second Special Session 2015

Title

Taxation, business privilege, maximum due increased, financial institution excise tax return due date revised, Secs. 10A-2-16.22, 40-14A-22, 40-14A-25 am'd.

Description

Under current law, all entities doing business or registered to do business in Alabama, have an annual filing obligation for Business Privilege Tax. The Business Privilege Tax is calculated based on an entity’s net worth, apportioned to Alabama. There is a minimum of $100 Business Privilege Tax imposed annually on all entities subject to this tax. Currently, most taxpayers have an annual maximum Business Privilege Tax due of $15,000. The Business Privilege Tax rate is determined by the taxpayer’s federal taxable income, apportioned to Alabama.

In addition, under current law, the Business Privilege Tax due date for financial institutions is March 15. The Alabama Excise Tax return filed by financial institutions is due April 15. Taxpayers often need to extend the filing date of the Business Privilege Tax in order to have complete information not available until the financial institution Excise Tax return is completed. All other entity types have corresponding due dates for both the Business Privilege Tax and the Alabama Income Tax return.

This bill would eliminate the annual Business Privilege Tax filing obligation for all business entities with less than $10,000 in Alabama taxable net worth.

This bill increases the annual maximum amount of Business Privilege Tax due from $15,000 to $30,000, and increases tax rates and the minimum tax due.

This bill increases the minimum tax rates for financial institutions and will require financial institutions with in-state deposits to calculate their tax based on those deposits.

This bill amends the Business Privilege Tax due date for taxpayers subject to the financial institution Excise Tax from March 15 to April 15, to provide for corresponding tax return due dates for financial institutions.

In addition, Section 12 of Act 99-665, as amended by Act 2000-705, is codified by this bill as part of Section 40-14A-22. Other technical corrections from these acts are also codified by this bill.

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Subjects

Taxation