HB643 Alabama 2019 Session

Summary

Primary Sponsor

Merika ColemanSenator

Democrat

Session

Regular Session 2019

Title

Income tax, deductions for federal FICA taxes, tax on wages removed, self-employment taxes reduced, Sec. 40-18-15 am'd.

Summary

HB 643 would remove the deduction for FICA taxes from Alabama income tax and change how use tax revenue is distributed to state funds.

What This Bill Does

It eliminates the deduction for Federal Insurance Contribution Act (FICA) taxes paid from Alabama income tax calculations. It also rewrites how use tax money is split: after other distributions, 75% of remote use tax goes to the General Fund and 25% to the Education Trust Fund; the remaining use tax funds are split 47% to the Education Trust Fund General Fund for mental health and health care and 53% to the General Fund, with CHIP funding taken as a first charge. The changes apply to tax year 2020 and later.

Who It Affects

• Individual Alabama income taxpayers who currently deduct FICA taxes would no longer be able to deduct them, which could increase their Alabama taxable income and taxes owed.
• The state budget and public programs (General Fund, Education Trust Fund, mental health/health care funding, CHIP) would see different distributions of use tax revenue and a defined priority for CHIP funding.

Key Provisions

• Remove the deduction for FICA taxes paid from Alabama income tax (amending 40-18-15).
• Change the distribution of use taxes: specify 75% of remote use tax to General Fund and Education Trust Fund split of 25%; remaining use tax funds split 47% to ETF General Fund for mental health/health care and 53% to General Fund; CHIP funding as a first charge; treat out-of-state seller use tax as use tax; effective for tax year 2020 and later.

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