HB64 Alabama 2016 Session

Summary

Primary Sponsor

Lynn Greer

Republican

Session

Regular Session 2016

Title

Taxation, defined contribution deferred compensation plans, first $15,000, $30,000 of benefits exempt from state and local income taxes, Revenue Dept. authorized to adopt administrative rules, Sec. 40-18-19 am'd.

Summary

The bill would gradually exempt up to 90% of annual income from defined contribution deferred compensation plans from Alabama state and local income taxes, phased in from 2017 to 2021.

What This Bill Does

It creates a new exemption for income from defined contribution deferred compensation plans. The exemption starts at 20% in 2017 and increases by 20 percentage points each year, reaching 90% in 2021 and thereafter. This reduces the amount of that income that is taxed by the state and local governments. The Department of Revenue would issue rules to implement and administer the exemption.

Who It Affects

• Resident individuals who receive income from defined contribution deferred compensation plans; a portion of their benefits would be exempt from state and local income taxes, increasing each year until 90% is exempt.
• Alabama Department of Revenue; gains authority to promulgate rules necessary to implement and administer the exemption.

Key Provisions

• Adds a new exemption for income from defined contribution deferred compensation plans, starting at 20% exempt in 2017 and phasing in to 90% exempt by 2021 and thereafter.
• The exemption applies to state and local income taxation; the Department of Revenue may promulgate rules to implement and administer the exemption.
• Effective immediately upon passage; amends Section 40-18-19 of the Code of Alabama 1975.

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

Subjects

Taxation