AL HB240

Repeals the total withholding exemption that previously allowed employees to avoid income tax withholding if they had no tax liability in the prior year and anticipated no liability in the current year.

Eliminates Section 40-18-73(h) which permitted employers to skip withholding taxes when an employee filed a withholding exemption certificate meeting those two conditions.

Addresses tax avoidance practices where many Alabama taxpayers used total exemption certificates to avoid taxes while discontinuing income tax return filings despite having tax liability.

Requires the Department of Revenue Commissioner to promulgate rules and regulations necessary to implement the act's provisions.

Takes effect September 1, 2015, following passage and gubernatorial approval.