SB 375

This bill would propose an amendment to the Constitution of Alabama of 1901, entitled the Individual Flat Tax Act of 2018, to repeal Amendment 25 of the Constitution of Alabama of 1901, now appearing as Section 211.01 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, and 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 revise the individual income tax structure by providing a specific tax rate; to provide for certain tax credits and deductions under certain conditions; and to authorize the Legislature to enact general laws to implement the amendment

To propose an amendment to the Constitution of Alabama of 1901, to repeal Amendment 25 of the Constitution of Alabama of 1901, now appearing as Section 211.01 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, and 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 revise the individual income tax structure by providing a specific tax rate; to provide for certain tax credits and deductions under certain conditions; and to authorize the Legislature to enact general laws to implement the amendment.

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) This amendment shall be known and may be cited as the Individual Flat Tax Act of 2018. (b) Effective January 1, 2019, the following provisions of the Constitution of Alabama of 1901 are repealed: (1) Amendment 25 of the Constitution of Alabama of 1901, now appearing as Section 211.01 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, relating to income taxes. (2) 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, relating to deductions of federal income tax from gross income. (c) For the purposes of this amendment, "adjusted gross income" shall mean the adjusted gross income of an individual for a taxable year as computed pursuant to the federal Internal Revenue Code, 26 U.S.C. Title 26, as amended from time to time. (d) (1) Subject to subsection (e), effective for tax years beginning on and after January 1, 2019, a tax is imposed on every individual who is a resident of Alabama and on every individual who is not a resident of Alabama and who performs personal services, transacts business, or owns property in Alabama. The rate of the tax shall be 4.20 percent. (2) The tax imposed under subdivision (1) shall be imposed on the resident's net income and on the non resident's net income from performing personal services, transacting business, or owning property in Alabama. (e) (1) An individual may exclude from adjusted gross income any income that is derived from sources within another jurisdiction which is taxed under the law of that jurisdiction regardless of the residence or domicile of the individual. (2) An individual may not claim any deduction, credit, or exemption unless it is an exemption of defined benefit retirement income up to seventy thousand dollars ($70,000) (one hundred forty thousand ($140,000) on a joint return filed by a married couple); a deduction for primary home mortgage interest; a deduction for charitable contributions; and a deduction for the first nine thousand dollars ($9,000) of income (eighteen thousand ($18,000) on a joint return filed by a married couple). (f) The Legislature shall enact general laws for the implementation of this amendment.

Section 2

An election upon the proposed amendment shall be held at the next statewide primary or general election in accordance with Sections 284 and 285 of the Constitution of Alabama of 1901, now appearing as Sections 284 and 285 of the Official Recompilation 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 revise the individual income tax structure by providing a single specific tax rate for individuals; to provide for certain tax credits and deductions under certain conditions; and to authorize the Legislature to enact general laws to implement the amendment.

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

Yes ( ) No ( )."