HB418 Alabama 2022 Session

Summary

Primary Sponsor

Kyle South Representative

Republican

Session

Regular Session 2022

Title

Relating to corporate income tax deductions, providing business interest expense deduction limitations, to provide a deduction equal to the business interest expense disallowed on the federal income tax return as a result of 26 U.S.C. Section 163 (j), Sec. 40-18-39.1 repealed.

Description

Under 26 U.S.C. § 163(j), as amended by the Tax Cuts and Jobs Act of 2017 (Public Law 115-97), business interest deductions for a taxable year are generally limited to 30% of its adjusted taxable income for that year, plus any business interest income. Alabama’s income tax provisions incorporated the federal business interest limitations of the Tax Cuts and Jobs Act due to conformity with federal taxable income.

Under Section 9 of Act 2021-1, now appearing as Section 40-18-39.1, Code of Alabama 1975, the limitations on business interest expense deductions were modified for certain Alabama taxpayers.

This bill would repeal Section 40-18-39.1, Code of Alabama 1975, and provide a deduction in an amount equal to the business interest expense disallowed on the taxpayer’s federal income tax return as a result of the application of 26 U.S.C.

§ 163(j).

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Subjects

Income Tax