HB451 Alabama 2016 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Oliver Robinson
Democrat
Session: Regular Session 2016
Title: Financial institution excise tax, allocation and apportionment formula prescribed by Dept. of Revenue, revised, Sec. 40-16-4 am'd.
Summary: HB451 would change Alabama's financial institution tax rules by removing the requirement that the Department of Revenue's allocation and apportionment formula mirror the Multistate Tax Commission's formula.
What This Bill Does
It affects how financial institutions with income taxed both inside and outside Alabama allocate and apportion their net income for the excise tax. The bill removes the mandate that the Department of Revenue's allocation and apportionment rules must be substantially the same as the Multistate Tax Commission's formula. The excise tax rate remains 6.5% of the net income allocated and apportioned for the year. Until the Department adopts new regulations, the Multistate Tax Commission's formula would be used to the extent it is not inconsistent with the law.

Who It Affects
Financial institutions operating in Alabama that have income taxable both within and outside the state, as their allocation/apportionment rules may diverge from the MTC formula.
Alabama Department of Revenue, which gains authority to set its own allocation/apportionment regulations for financial institutions.
Multistate Tax Commission, whose recommended formula is no longer required to be mirrored by Alabama's regulations (at least in the long term).

Key Provisions
Eliminates the requirement that the allocation and apportionment formula prescribed by the Department of Revenue for financial institutions be substantially the same as the Multistate Tax Commission's formula.
Maintains the excise tax rate at 6.5% of the net income allocated and apportioned for the taxable year.
Directs the Department of Revenue to adopt regulations for allocation and apportionment; until those regulations are in effect, the MTC formula is used to the extent not inconsistent with the chapter.
Effective date: immediately following 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: Financial Institutions