HB140 Summary

• Amends Section 40-16-1.3 of the Alabama Code to clarify that net income for credit unions means financial statement income less specified subtractions, as allocated and apportioned to Alabama.

• Allows credit unions to subtract dividends received from other credit unions and credit union service organizations, plus reasonable additions to reserves for losses, bad debts, and extraordinary expenses as approved by each credit union's Board of Directors and accepted by the Alabama Credit Union Administration.

• Specifies that direct transfers between reserve accounts, including allowances for loan losses, that are not included in net income calculations shall not be includible in taxable income calculations.

• Prohibits the Department of Revenue from entering new assessments or granting refunds for tax years ending on or before January 1, 2021 related to reserve deductions, and voids any assessments entered prior to the effective date with refund petitions to be denied.

• Becomes operative for tax years beginning after December 31, 2020, and effective January 1, 2021.