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AL HB466
Bill
Status
4/9/2015
Primary Sponsor
Roderick Scott
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AI Summary
HB466 Summary
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Establishes a factor presence nexus standard for Alabama income tax jurisdiction by adding Section 40-18-31.2 to the Alabama Code, determining when businesses and individuals are subject to state income tax.
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Alabama residents, domiciliaries, and in-state organized businesses automatically have substantial nexus with the state; nonresident individuals and out-of-state businesses have nexus when property, payroll, or sales exceed specified thresholds.
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Sets nexus thresholds at $50,000 of property, $50,000 of payroll, $500,000 of sales, or 25 percent of total property, payroll, or sales during the tax period.
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Directs the commissioner to annually adjust thresholds based on cumulative Consumer Price Index changes of 5 percent or more since January 1, 2015, rounding adjustments to the nearest $1,000.
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Preserves Public Law 86-272 protections for qualifying out-of-state businesses engaged solely in solicitation, preventing Alabama from imposing income tax on those protected taxpayers even if thresholds are exceeded.
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Takes effect for tax years beginning after December 31, 2014.
Legislative Description
Taxation, factor presence nexus standard based on business activity established for purpose of being subject to income taxation in the state, in state residence or domicile for individuals, businesses organized in state are subject to tax, nonresident individuals and businesses organized out of state that do business in the state are subject to state tax on income, Sec. 40-18-31.2 added
Taxation
Last Action
Read for the first time and referred to the House of Representatives committee on Ways and Means Education
4/9/2015