Capitol News & Notes: Week 8 - Business Privilege Tax Reduction and Call for Action

Capitol News & Notes: Week 8 - Business Privilege Tax Reduction and Call for Action

Week eight of the 2022 regular legislative session is behind us. The Legislature convened three days during the week. This leaves only nine legislative days remaining this session. Here are the highlights from week eight.


General Update

Last week, lawmakers spent considerable time on a bill that would allow Alabamians to carry a handgun on their person or in a vehicle without a permit. The bill passed both chambers and was signed by Governor Ivey. The final bill preserves the rights of business owners to ban guns on certain premises.

The fiscal year 2023 budgets also saw movement as the House approved the $8.1 billion Education Trust Fund (ETF) budget and the $2.7 billion General Fund budget was approved in House committee. The ETF budget now moves to the Senate for committee consideration, while the General Fund budget awaits final approval by the House.

Two gambling bills, filed during week seven, were passed out of a Senate committee on Wednesday. Discussed last week, the two-bill packet includes a constitutional amendment, which requires a statewide referendum or vote, and the laws setting up a gambling commission and operating rules. The two bills can now be considered by the full Senate.


Business Privilege Tax Reduction Bill Moving

The state currently places a business privilege tax on corporations, limited liability entities, and disregarded entities registered or doing business in Alabama. The tax is graduated based on the taxable income of the entity with a minimum tax of $100, which equals $80,000 in taxable income (i.e., companies below $80,000 in taxable income automatically pay $100).

Companion bills were introduced in week six to reduce the minimum business privilege tax to $50 for 2023 and $0 for 2024 and beyond. The bills passed their chambers of origin last week, and the Senate version, SB 290, is on the agenda in House committee for Wednesday. The bills have a fiscal note of over $20 million dollars, which lawmakers plan to split between the General Fund and the ETF. For small entities, this will be one less thing to pay amid increasing costs.


Strengthen Alabama Homes Program - Funding Bill Passes

HB 39, providing one-time and future funding to the Strengthen Alabama Homes program, passed both chambers and went to the Governor last week. The funding will assist the Alabama Department of Insurance, which oversees the program, in clearing the backlog of applications for the program. You can find more information about the program and the bill in CNN week three here or week six here.


Call for Action – First-Time Home Buyer Savings Account Renewal

The First-Time Home Buyer Savings Account Act renewal bill, HB 171, is in the hands of the Senate. A call for action was issued last week for members to encourage their senators to consider and vote yes for the bill. Thank you to all who have responded to the call! If you have not yet responded, you can read more and do so here.

The bill renews the program for five more years and increases the length of time a first-time homebuyer can make contributions to the savings account to ten years. More information on the program and the bill can be found in prior CNN articles here, here and here.


A Look Ahead

Legislative leadership announced that this would be a two-day week, with legislative days on Tuesday and Thursday and a committee day on Wednesday. Next week, the Legislature is scheduled to be out for Spring Break and will reconvene on Tuesday, March 29th. With seven legislative days to utilize after Spring Break, the end of the session will likely occur during the week of April 10th.