SB5 Alabama 2020 Session

Summary

Primary Sponsor

Donnie ChesteenSenator

Republican

Session

Regular Session 2020

Title

Taxation, provide income tax deduction, military stationed out of state

Summary

SB 5 would create a state income tax deduction for Alabama taxpayers not residing in Alabama who are stationed outside the state and serve in the U.S. military or Alabama National Guard, for military pay and allowances not already deductible.

What This Bill Does

The bill allows eligible out-of-state military members to deduct military pay and allowances on Alabama income tax returns. It restricts the deduction to pay not already deductible or excludable for state tax purposes and prohibits claiming it for pay earned while stationed in Alabama. It also requires annual certification of residence status to the Alabama Department of Revenue and directs the Department to adopt rules to implement and enforce the deduction. The new deduction becomes effective for tax years beginning after December 31, 2020.

Who It Affects

• Alabama taxpayers not currently residing in Alabama who serve in active duty in the U.S. Army, Navy, Air Force, Marine Corps, Coast Guard, any reserve component, or the Alabama Army National Guard or Alabama Air National Guard, and who are stationed outside the state; they would be able to claim the deduction for eligible pay and allowances.
• The Alabama Department of Revenue and the state government; they would administer and enforce the deduction, including collecting annual residence status certifications and issuing implementing rules.

Key Provisions

• Section 1(a): Creates a deduction on Alabama income tax for military pay and allowances not otherwise deductible or excludable, for taxpayers not currently residing in Alabama and serving in specified military roles; pay earned while stationed in Alabama is not deductible.
• Section 1(b): Requires the taxpayer to annually certify residence status on forms provided by the Alabama Department of Revenue to claim the deduction.
• Section 2: The Department of Revenue must adopt rules to implement and enforce the deduction.
• Section 3: The deduction becomes effective for tax years beginning after December 31, 2020.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Revenue Department