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AL HB170
Bill
Status
2/11/2021
Primary Sponsor
Danny Garrett
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AI Summary
HB170 Summary
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Excludes federal COVID-19 relief payments (stimulus checks, tax credits, advance refunds, disaster relief, SBA subsidies, EIDL grants, and student loan forgiveness) from Alabama individual and corporate income taxation for applicable tax years.
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Exempts amounts received from the Coronavirus Relief Fund from Alabama income tax and financial institution excise tax, and excludes employer-paid education loan assistance from employee income.
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Modifies corporate income tax apportionment from a three-factor formula (property, payroll, sales) to a single-sales-factor apportionment method; retroactively decouples from federal Global Intangible Low-Taxed Income (GILTI) provisions and certain capitalized contributions.
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Changes how corporations calculate business interest expense deductions to apply federal limitations on a separate-entity or consolidated return group basis rather than allowing unlimited deductions.
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Creates the "Alabama Electing Pass-Through Entity Tax Act" allowing S corporations and partnerships to elect entity-level taxation at the highest marginal corporate rate, with owners not liable for pass-through taxation on their shares of income.
Legislative Description
Income tax, exclusion for federal tax credits, advance refunds, qualified disaster relief payments, subsidies, grants, student loans, or loan forgiveness from federal CARES Act and subsequent federal COVID relief legislation, exemption from income and financial institution excise tax for amounts from the Coronavirus Relief Fund, to decouple from 26 U.S.C, 951A and 118 (b)(2), to change business interest expense limitation, and to allow Electing Pass-Through Entity to be taxed at entity level, Sec. 40-27-1 am'd.
Taxation
Last Action
Delivered to Governor at 11:42 a.m. on February 11, 2021.
2/11/2021