SB 105

This bill would propose an amendment to the Constitution of Alabama of 1901, to repeal Amendment 225 of the Constitution of Alabama of 1901, now appearing as Section 211.04 of the Official Recompilation of the Constitution of Alabama of 1901, as amended; to limit the state income tax deduction for federal income taxes for individual taxpayers; to exempt sales of food and over-the-counter drugs from state sales tax; and to prohibit local governments from levying separate sales taxes only on the sale of food or over-the-counter drugs

To propose an amendment to the Constitution of Alabama of 1901, to repeal Amendment 225 of the Constitution of Alabama of 1901, now appearing as Section 211.04 of the Official Recompilation of the Constitution of Alabama of 1901, as amended; to limit the state income tax deduction for federal income taxes for individual taxpayers; to exempt sales of food and over-the-counter drugs from state sales tax; and to prohibit local governments from levying separate sales taxes only on the sale of food or over-the-counter drugs.

Section 1

The following amendment to the Constitution of Alabama of 1901, as amended, is proposed and shall become valid as a part thereof when approved by a majority of the qualified electors voting thereon and in accordance with Sections 284, 285, and 287 of the Constitution of Alabama of 1901, as amended: PROPOSED AMENDMENT (a) Amendment 225 of the Constitution of Alabama of 1901, now appearing as Section 211.04 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, is repealed. (b) For all tax years beginning after December 31, 2017, federal income taxes paid or accrued shall be allowed as a deduction for individual income taxpayers, subject to the following limitations: (1) For single, married filing separately, and head of household taxpayers with adjusted gross income of one hundred thousand dollars ($100,000) or less, and for married taxpayers filing jointly with adjusted gross income of two hundred thousand dollars ($200,000) or less, all federal income taxes paid or accrued shall be allowed as a deduction. (2) For single, married filing separately, and head of household taxpayers with adjusted gross income of more than one hundred thousand dollars ($100,000), the federal income tax deduction shall be reduced by an amount equal to one percent of federal income taxes paid or accrued for each five hundred dollars ($500) of adjusted gross income in excess of one hundred thousand dollars ($100,000). (3) For married taxpayers filing jointly with adjusted gross income of more than two hundred thousand dollars ($200,000), the federal income tax deduction shall be reduced by an amount equal to one percent of federal income taxes paid or accrued for each one thousand dollars ($1,000) of adjusted gross income in excess of two hundred thousand dollars ($200,000). (c) Beginning January 1, 2018, the sale of food and over-the-counter drugs shall be exempt from state sales tax. Local governments shall continue to collect sales taxes on food and over-the-counter drugs at the same rate collected for the local portion of the retail sales tax; provided, however, no local government may levy a separate sales tax or tax in the nature of a sales tax to be collected only on the sale of food or over-the-counter drugs. For purposes of this amendment, food means food as defined in 7 U.S.C. §2012, et seq., for purposes of the federal Supplemental Nutrition Assistance Program, regardless of where or by what means food is sold. In the event that the federal Supplemental Nutrition Assistance Program definition of food no longer exists, the Legislature shall provide a new definition of food by general law. Over-the-counter drugs means drugs that are sold without a prescription and that contain a label that identifies the product as a drug as required by 21 C.F.R. §201.66. The over-the-counter drug label includes a drug facts panel or a list of the active ingredients with a list of those ingredients contained in the compound, substance, or preparation. Over-the-counter drugs do not include grooming and hygiene products, including soaps and cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants, and sun tan lotions and screens, regardless of whether the products meet the definition of over-the-counter drugs.

Section 2

An election upon the proposed amendment shall be held in accordance with Sections 284 and 285 of the Constitution of Alabama of 1901, as amended, and the election laws of this state.

Section 3

The appropriate election official shall assign a ballot number for the proposed constitutional amendment on the election ballot and shall set forth the following description of the substance or subject matter of the proposed constitutional amendment:

Proposing an amendment to the Constitution of Alabama of 1901, to repeal Amendment 225 of the Constitution of Alabama of 1901, now appearing as Section 211.04 of the Official Recompilation of the Constitution of Alabama of 1901, as amended; to limit the state income tax deduction for federal income taxes for individual taxpayers; to exempt sales of food as defined for purposes of the federal Supplemental Nutrition Assistance Program and over-the-counter drugs from state sales tax; and to prohibit local governments from levying separate sales taxes only on sales of food or over-the-counter drugs.

Proposed by Act ________." This description shall be followed by the following language:

Yes ( ) No ( )."