SB189 Alabama 2022 Session

Summary

Primary Sponsor

Garlan GudgerSenator

Republican

Co-Sponsors

Gerald H. AllenWill BarfootWilliam “Bill” M. BeasleyTom ButlerDonnie ChesteenLinda Coleman-MadisonChris ElliottVivian Davis FiguresSam GivhanKirk HatcherJimmy HolleyAndrew JonesSteve LivingstonDel MarshJim McClendonTim MelsonRandy PriceGreg J. ReedDan RobertsMalika Sanders-FortierClay ScofieldDavid SessionsRodger SmithermanLarry StuttsJ.T. WaggonerApril WeaverTom WhatleyJack W. Williams

Session

Regular Session 2022

Title

Small Business Relief and Revitalization Act of 2022, cancellation of indebtedness income exempt from income tax, financial institution excise tax and corporate income tax due date extension, certain business tangible personal property ad valorem tax exemption, deposit of certified funds with Revenue in lieu of one-time surety bond for licensure, average monthly sales tax liability for estimated payments increased, Secs. 40-16-3.1, 40-18-39.1 added; Secs. 40-9-1, 40-23-6, 40-23-6.1, 40-23-7 am'd.

Summary

SB189 provides targeted tax relief for small businesses in Alabama, including an income tax exemption for certain ARPA loan forgiveness, tax filing extensions, a tangible personal property ad valorem exemption, and a bond/deposit option plus a higher estimated payment threshold for sales tax.

What This Bill Does

The bill exempts cancellation of indebtedness income from ARPA loan forgiveness under Section 1005 from Alabama income tax and related federal deduction calculations. It extends the filing deadline by one month for Alabama financial institution excise tax and corporate income tax returns, without extending tax payments, and allows a one-month extension for 2020 tax years in certain cases. It creates a state ad valorem tax exemption of up to $40,000 in market value for business tangible personal property, with counties and municipalities allowed to adopt the same exemption locally. It changes sales tax administration by allowing certified funds in lieu of a $25,000 bond for licensees, raises the average monthly sales tax liability threshold for estimated payments to $5,000, provides bond waivers for certain related parties, and creates a two-year compliance path to bond exemption, plus enables changes to filing frequencies and deadlines for returns.

Who It Affects

• Small to mid-sized Alabama businesses that own tangible personal property; they would benefit from the up-to-$40,000 ad valorem exemption (with local opt-ins).
• Corporate income taxpayers, financial institution excise taxpayers, and sales tax licensees; they would see extended filing deadlines, potential bond-deposit options, a higher threshold for estimated payments, and updated compliance requirements.

Key Provisions

• Exemption of cancellation of indebtedness income from ARPA loan forgiveness under Section 1005 from Alabama income tax; funds used remain exempt federally and are not counted toward deductible expenses or federal deduction calculations.
• One-month extension of the due date to file Alabama financial institution excise tax and corporate income tax returns (after the federal due date), with no extension of tax liability; the Department may extend for the 2020 tax year in some cases.
• Up to $40,000 exemption of market value from state ad valorem tax on business tangible personal property, with counties and municipalities allowed to adopt the same exemption locally.
• Allows deposit of certified funds in lieu of a $25,000 one-time sales tax bond; increases the estimated payment threshold to $5,000 average monthly liability; provides bond waivers for certain related parties or controlled groups; requires a two-year continuous-compliance period to be exempt from the bond requirement; permits license suspension or revocation for noncompliance.
• Taxpayers may elect quarterly, semi-annual, or annual filing frequencies for sales tax and other taxes, with specified deadlines and thresholds.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation