HB467 Alabama 2025 Session

Summary

Primary Sponsor

Anthony DanielsRepresentative

Democrat

Session

2025 Regular Session

Title

Taxation; to amend 40-18-14, Code of Alabama 1975, relating to overtime compensation

Summary

HB467 makes the overtime pay exemption from Alabama income tax permanent and requires an economic impact study and employer data reporting.

What This Bill Does

It removes the sunset on the overtime compensation exemption from gross income, making the exemption permanent. It requires the Department of Revenue and the Alabama Commission on the Evaluation of Services to conduct an economic impact study and publicly post the results, and it requires employers to report overtime pay data for full-time hourly employees on specified schedules. It takes effect June 1, 2025 and directs nonsubstantive technical updates to the code language.

Who It Affects

• Full-time hourly wage-paid employees who work overtime, as their overtime compensation would continue to be exempt from Alabama gross income tax.
• Employers with full-time hourly workers, who must collect and report overtime pay data and the number of employees paid overtime to the Department of Revenue on defined schedules.
• The Department of Revenue and the Alabama Commission on the Evaluation of Services, which will conduct the economic impact study, collect data, and publish findings.
• Alabama residents and taxpayers, who may see changes in state tax revenue effects and will be informed by the study about the economic impact of the exemption.

Key Provisions

• Remove the sunset provision, making the overtime exemption from gross income permanent for Alabama income tax purposes.
• Require the Department of Revenue and the Alabama Commission on the Evaluation of Services to conduct an economic impact study of the exemption and publicly post the results on the department's website, with broad definitions of economic effects (including consumer spending).
• Mandate employers to report data on overtime pay for full-time hourly employees, with specific reporting timelines starting from 2023 data through ongoing monthly or quarterly submissions after October 1, 2024; include deadlines and receiving agencies (DOR and related state bodies).
• Have the Department of Revenue provide the collected data to the Legislative Services Agency - Fiscal Division and the Department of Finance, with a separate study deadline of January 1, 2026 for the economic impact analysis.
• Include nonsubstantive, technical revisions to update the code language to current style and ensure consistency.

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 & Revenue