SB475 Summary

• Removes the exemption for gross receipts from contracts between contractors and counties, incorporated cities, or towns from the 5% privilege tax on contractors' gross receipts.

• Maintains an exemption for contracts where the State of Alabama is a joint party with a city, town, or county, which remain subject to the tax.

• Continues to exempt from taxation the portion of gross receipts from contractual escalation provisions for increases in fuel, materials, and labor costs.

• Restructures distribution of tax proceeds: first $41,000,000 split between Pensions and Security Trust Fund (15%) and Alabama Special Mental Health Fund (85%); next $54,000,000 distributed per Section 40-17-223; remaining proceeds distributed as 56.5% per Section 40-17-223, 6.5% to Pensions and Security Trust Fund, and 37% to Alabama Special Mental Health Fund.

• Becomes effective September 1, 2015.