HB198 Summary

• Clarifies the calculation of taxable income for credit unions under Alabama's financial institution excise tax by defining net income as financial statement income less specified subtractions, allocated and apportioned to Alabama.

• Allows credit unions to subtract dividends received from other credit unions and credit union service organizations, and reasonable additions to reserves for losses and bad debts as defined by each credit union's Board-approved Capital Preservation Plan.

• Prohibits items from being deducted more than once, deductions for excluded income items, or any item being included in multiple taxpayers' Alabama net income.

• Voids and makes unenforceable all financial institution excise tax assessments entered prior to the act's effective date for tax years ending on or before January 1, 2021 regarding reserve deductions, and directs the Department of Revenue to dismiss or withdraw such assessments with prejudice and deny related refund petitions.

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