HB277 Summary

• Adds Article 7 to Chapter 29, Title 40 of the Alabama Code to regulate reportable tax avoidance transactions and tax shelters through disclosure requirements and penalties

• Requires taxpayers to disclose reportable tax avoidance transactions (including listed transactions) on state income tax returns, with disclosure attached to original and amended returns for tax years when the transaction was entered into or when tax benefits are claimed

• Establishes penalties for taxpayers failing to disclose: $10,000 for natural persons and $50,000 for others regarding general reportable transactions; $100,000 for natural persons and $200,000 for others regarding listed transactions, plus up to 10% of tax benefit

• Requires material advisors to file returns and maintain lists identifying taxpayers for reportable tax avoidance transactions, with penalties of $50,000 for failure to report or $200,000 for listed transactions, and $10,000 per day for failure to provide requested lists

• Extends the statute of limitations for tax assessments by two years after disclosure is provided and authorizes civil injunctions against persons engaging in tax shelter activities or violating the article's requirements