The Council On State Taxation (COST), a nonprofit trade association representing taxpayers consisting of nearly 600 multistate corporations engaged in interstate and international business, in its "Best and Worst of State Tax Administration" report released in 2010, gave Alabama's tax system a "D." Only California received a lower grade. Alabama's grade was based, in part, on the lack of a truly independent appeals forum for tax cases, the inadequate time to file a protest before an independent dispute forum, and the need to "pay to play," meaning that the tax assessment must be paid before an appeal can be heard before a truly independent tribunal. for Alabama taxpayers, the grade is no surprise (although some might argue it should be lower).
The good news is that there is an effort underway currently with the beginning of the Alabama Legislature's Regular Session to revise Alabama's Taxpayers' Bill of Rights to address some of these concerns. That proposed legislation would also create the Alabama Tax Appeals Commission to provide an independent appeal source for Alabama taxpayers that will not require payment of the tax up front (although a filing fee may be due).
I urge readers to let their legislators know that Alabama taxpayers support this proposed legislation. It's time to raise our grades not only in the classroom, but on the tax administration front as well.
For details on the report, see the COST website at http://www.cost.org/StateTaxLibrary.aspx?id=17768.
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