HB170 Alabama 2021 Session

Summary

Primary Sponsor

Danny Garrett Representative

Republican

Co-Sponsor

Andy Whitt

Session

Regular Session 2021

Title

Taxation, certain tax credits, advance refunds, and other economic relief payments under the CARES Act excluded from income taxation, Alabama Taxpayer Stimulus Freedom Act of 2021, Sec. 40-27-1 am'd.

Description

Under the current provisions of the Code of Alabama 1975, amounts received as a result of federal tax credits or advance refunds and other economic relief payments provided under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent federal COVID relief legislation are not excluded from Alabama individual income taxation.

Under the current provisions of the Code of Alabama 1975, cancellation of indebtedness income resulting from the forgiveness of small business loans forgiven under Sections 1106 and 1109 of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and the federal Economic Aid for Hard-Hit Businesses, Nonprofits, and Venues Act is not excluded from Alabama individual income taxation and may not be excluded from Alabama corporate income taxation and financial institution excise taxation.

Under the current provisions of the Code of Alabama 1975, the apportionment factor for most corporate income taxpayers is calculated using a three-factor apportionment formula, with the sales factor double weighted.

Under the current provisions of the Code of Alabama 1975, taxable income for corporate income tax is defined as federal taxable income with certain additions and deductions. Alabama’s corporate income tax law automatically conforms to federal corporate income tax laws, including changes imposed by the federal Tax Cuts and Jobs Act (TCJA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Under the current provisions of the Code of Alabama 1975, any amount received from the state Coronavirus Relief Fund is treated as taxable income for purposes of Alabama income and financial institution excise taxation.

This bill would provide for an exclusion from Alabama individual income taxation for any federal tax credits, advance refunds, Small Business Administration subsidy payments, Emergency EIDL grants, Targeted EIDL advances, student loan payments, or qualified disaster relief payments, resulting from the federal Coronavirus Aid, Relief, and Economic Security Act, Taxpayer Certainty and Disaster Relief Tax Act, or COVID-related Tax Relief Act.

This bill would provide an income and financial institution excise tax exemption for any amounts received from the Coronavirus Relief Fund.

This bill would provide for an exclusion from Alabama income taxation and financial institution excise taxation for small business loans forgiven under the Paycheck Protection Program established by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.

This bill would change the apportionment factor for most corporate income taxpayers from a three-factor apportionment formula, with the sales factor double weighted, to a single sales factor formula.

This bill would decouple Alabama from the new federal law 26 U.S.C. § 951A relating to Global Intangible Low-Taxed Income.

This bill would provide that any contribution by the State of Alabama or any political subdivision computed under 26 U.S.C. § 118(b)(2) shall be deducted from federal taxable income for purposes of computing taxable income.

This bill would provide that for a tax year in which the business interest expense deduction of a corporate taxpayer, or of any federal consolidated return group of which the taxpayer is a member, is not limited pursuant to 26 U.S.C. § 163(j) on the federal income tax return, the taxpayer will not be subject to this limitation at the state level.

This bill would also provide that a Pass-Through Entity may elect to be taxed at the entity level instead of its owners, members, partners, or shareholders.

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Subjects

Taxation