SB18 Alabama 2016 1st Special Session Session

Summary

Primary Sponsor

Tim MelsonSenator

Republican

Session

First Special Session 2016

Title

Tax refund, interest paid by Department of Revenue on overpayments, required after receipt of refund petition, Sec. 40-1-44 am'd.

Summary

SB18 changes when the Department of Revenue must pay interest on tax refunds and removes the exemption for gasoline tax refunds.

What This Bill Does

It would start interest on most tax refunds 30 days after the department receives a properly documented refund petition (instead of from the date of overpayment). It keeps special timing for refunds related to net operating loss carryovers/carrybacks and for withholding/estimated tax refunds. It also ends the exemption that previously kept gasoline tax refunds for agricultural use or static testing from earning interest, so those refunds would now accrue interest under the general rules.

Who It Affects

• Taxpayers (individuals and businesses) who overpay taxes and receive refunds; under SB18, their refunds would start earning interest 30 days after the department gets a properly documented refund petition, with exceptions for NOL carryover/carryback and withholding/estimated tax refunds.
• Taxpayers receiving gasoline tax refunds for agricultural use or static testing; those refunds would no longer be exempt from interest and would accrue interest under the general rules.

Key Provisions

• Amends 40-1-44 to start interest on most refunds 30 days after the department receives a properly documented refund petition, instead of from the date of overpayment.
• Keeps existing timing for refunds involving net operating loss carryovers/carrybacks (interest from the filing date of the refund claim) and withholding/estimated tax refunds (interest starting 90 days after the due date or filing date, whichever later).
• Eliminates the exemption that gasoline taxes paid on gasoline for agricultural use or static testing are not subject to interest; these refunds would now accrue interest.
• Retains other no-interest categories (e.g., certain license taxes, tobacco taxes, and some motor fuels taxes) as currently provided, so those refunds would remain exempt from interest.

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

Subjects

Tax Refunds