SB347 Alabama 2020 Session

Summary

Primary Sponsor

Will BarfootSenator

Republican

Session

Regular Session 2020

Title

Income tax, military, active duty, stationed in another state, exempt from state income tax unless physically present for six months or more, Sec. 40-18-3 am'd.

Summary

This bill would exclude Alabama resident active-duty military income from Alabama state income tax when they are stationed outside Alabama, unless they spend six months or more physically in Alabama during the tax year.

What This Bill Does

It modifies Alabama's income tax law to exempt pay for active military service earned while the service member is stationed outside Alabama, provided the member is a legal resident of Alabama. The exemption does not apply if the service member is physically present in Alabama for six months or more in the same calendar year. The change applies to calendar year 2020 and later and becomes effective immediately after approval by the Governor.

Who It Affects

• Alabama residents who serve in the U.S. Armed Forces and are stationed outside Alabama during a tax year; their eligible military pay would be exempt from Alabama state income tax unless they are in Alabama for six months or more.
• Alabama Department of Revenue and employers paying military compensation, which would need to apply the six-month in-state presence test and administer the new exemption.

Key Provisions

• Amends Section 40-18-3 to exempt from Alabama income tax the compensation paid by the United States to an Alabama resident for active military service when stationed outside Alabama during the tax year, unless the member is physically present in Alabama for six months or more in that calendar year.
• Specifies that the exemption applies to calendar year 2020 and thereafter.
• Effective date: becomes law immediately following its passage and approval by the Governor.

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

Subjects

Income Tax