HB548 Summary

• Establishes a factor presence nexus standard for determining when nonresident individuals and out-of-state business entities must file income tax returns in Alabama.

• Creates specific threshold amounts that establish substantial nexus: $50,000 in property, $50,000 in payroll, $500,000 in sales, or 25% of total property, payroll, or sales.

• Requires the Department of Revenue to annually adjust nexus thresholds based on cumulative changes in the Consumer Price Index, with adjustments applying to tax periods beginning after the adjustment is made.

• Defines property, payroll, and sales for nexus purposes, including rules for calculating values of owned and rented property, compensation paid to employees, and gross receipts from various transaction types.

• Applies Public Law 86-272 protections, preventing Alabama from taxing certain out-of-state businesses protected under federal law regardless of whether they exceed nexus thresholds.