SB183 Alabama 2016 Session

Summary

Primary Sponsor

Tim MelsonSenator

Republican

Session

Regular 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

SB183 would require the Department of Revenue to pay interest to taxpayers on tax refunds, starting 30 days after the department receives a refund petition and supporting documents.

What This Bill Does

It amends Section 40-1-44 to specify when interest on tax refunds is paid and how the amount is calculated. For properly documented refund petitions, interest begins 30 days after the department receives the petition and supporting documents, and it uses the same rate as the underpayment rate. In other cases, interest follows existing rules, including specific start dates for NOL carryovers (from the filing date of the claim) and withheld/estimated taxes (90 days after the due date or filing, whichever is later). The bill also lists refunds that do not qualify for interest and sets the interest rate to align with the underpayment rate.

Who It Affects

• Taxpayers who overpay taxes and file a refund petition: eligible to receive interest starting 30 days after the petition and supporting documents are received.
• Taxpayers whose refunds involve taxes specifically exempt from interest (e.g., tobacco taxes, certain license taxes, and several gasoline/motor fuels taxes): these overpayments would not earn interest.

Key Provisions

• Interest on refunds to be paid by the Department of Revenue on properly documented refund petitions, starting 30 days after the department receives the petition and supporting documentation.
• Interest rate for refunds is the same as the underpayment rate used by the Treasury (26 U.S.C. 6621 rate).
• Specific exceptions for when interest starts in other scenarios: NOL carryovers start from the date the refund claim is filed; withheld and estimated taxes start 90 days after the due date or filing date, whichever is later.
• No interest will be paid on overpayments for certain taxes, including: taxes refunded to entities per 40-9-12/40-9-13; license taxes refunded per 40-12-23/40-12-24; gasoline taxes for agricultural use and for static engine testing; motor fuels excise tax refunds/credits under 40-17-141/40-17-142; tobacco taxes; and motor fuels excise tax refunds under the Alabama Terminal Excise Tax Act paid within 90 days of proper documentation.
• Effective date: the act becomes effective on the first day of the third month after passage and governor approval.

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