The majority Republican leadership has stated its goal to have a controversy-free and relatively short session this year. However, the Democratic minority seems set to delay and distract at every turn. Translation? Do not expect the 2014 Regular Session to be free of controversy, nor should you expect it to be much shorter than usual. Best guess is that the session will likely end in early April this year. That gives legislators time to head home and ramp up their re-election campaigns in time for the state primary elections to be held in early June. The deadline for qualifying for those elections has been moved up this year to February 7, to make certain to accommodate Alabama voters who are in the military overseas.
On the good news front, it appears that the Special Education Trust Fund is in decent shape this year and, as one might expect in an election year, proposals are on the table to give teachers at least a 2% increase in pay. Unfortunately, the General Fund, which is swallowed up significantly by Medicaid and corrections expenses, continues to be in very poor shape with legislators advising that they have even less to work with in this budget than last year in terms of dollars to be spent. Some estimate that amount at north of $75 million less. This will almost certainly guarantee some General Fund budget fights along the way.
From a tax perspective,
it is interesting that the announced agenda for the Republican legislators is
heavy with proposed tax legislation.
First, there is the
proposed Small Business Tax Relief Act,
which would raise the threshold for when businesses are required to make
monthly estimated sales tax payments in advance from the current $1000 to $2500
a month.
Next is the Business Tax Streamlining Act, which
would cause the creation of a new “one-stop shop” online filing system to be
used for the filing of business personal property taxes. It would also allow business claiming $10,000
or less in business personal property tax to file a short form without the need
to itemize their property.
The Tax Elimination Act (who wouldn’t want that, right?) would
authorize the Alabama Department of Revenue to suspend taxes and fees when the
cost of collecting the tax exceeds the revenue the tax produces.
Once again, the Alabama Taxpayers’ Bill of Rights II
legislation will be before the Alabama Legislature in a continued attempt to
make Alabama’s tax system fairer to taxpayers.
The legislation includes provisions for the new Alabama Tax Appeals
Commission, which would be wholly independent of the Department of Revenue,
unlike the current Administrative Law Division, where those making the
decisions on taxpayer disputes are actually employed by the Department of Revenue.
Furthermore, the Adoption Tax Credit Act would give
Alabama residents who adopt an Alabama child a one-time, $1000 income tax
credit to help offset some of the expenses of the adoption process.
Legislation has also
been pre-filed that would affirm the long-standing exemption from Alabama sales
and use taxes for private schools and colleges in Alabama that are
qualified as tax-exempt entities for federal income tax purposes. Readers may recall that last year a court
struck down the Alabama Department of Revenue’s long-standing regulation that
placed private schools on the same level as public schools for purposes of the sales
and use tax exemption.
Finally, we will be
carefully watching for proposed tax legislation that might pop-up during the
session and will advise readers of any significant developments. Of course, once the session is over we will
provide you with details on what passed and what failed to pass. If you have legislation of particular
interest that you want us to watch, please let us know.
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