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Ainsworth unveils Alabama Small Business Commission legislative package; Tax cuts, exemptions included in proposal

Wednesday, Lt. Gov. Will Ainsworth announced the Alabama Small Business Commission’s legislative package, which consists of tax cuts, tax exemptions, paperwork reductions, and other reforms.

The Alabama Small Business Commission, which falls under the authority of the lieutenant governor’s office, is chaired by State Rep. Danny Garrett (R-Trussville).

According to Ainsworth, the commission’s legislative package would serve to further support Alabama’s growing economy by implementing measures to assist small businesses.

“Alabama is experiencing its lowest unemployment and best economy in history, and the bills in this package will help small businesses continue to thrive, expand, and provide new opportunities,” asserted Ainsworth. “Rep. Garrett and the members of the Alabama Small Business Commission deserve the thanks of all Alabamians for their hard work, and I fully endorse the legislative package they have crafted.”

Senate Bill 18, sponsored by State Sen. Arthur Orr (R-Decatur), would provide an income tax exemption for the first $10,000 of proceeds from a retirement plan for individuals age 65 for older. State Rep. Lynn Greer (R-Rogersville) carries the bill in the lower chamber.

Also carried by Orr and Greer is a tax cut proposal that increases the threshold for the maximum dependent exemption from $20,000 to $50,000. The bill would also adjust the gross income floor for the optional standard deduction for taxpayers that are married filing jointly, head of family, and single from $23,000 to $25,500 and from $10,500 to $12,750 for taxpayers that are married filing separately.

Additionally, the bill would move the standard deduction amount from $4,000 to $5,000 for taxpayers that are married filing jointly and from $2,000 to $2,500 for taxpayers that are married filing separately, head of family and single.

Sponsored by State Rep. Jim Carns (R-Birmingham) and carried in the upper chamber by State Sen. Dan Roberts (R-Mountain Brook), House Bill 147 would create a state income tax exemption for those who received federal child tax credits, earned income tax credits, and child and dependent tax credits under the American Rescue Plan Act (ARPA).

House Bill 82, sponsored by Garrett, would institute an ad valorem tax exemption of up to $40,000 on the market value of business tangible personal property. According to the lieutenant governor’s office, the exemption would provide employers with a tax cut and reduce paperwork.

Senate Bill 100 would create a “seasonal worker” classification to exempt employers from paying unemployment taxes on such employees. Ainsworth’s office advised that the change would assist businesses in the hospitality industry and retailers operating during holiday seasons. The legislation is sponsored by State Sen. Chris Elliott (R-Daphne).

A bill that has yet to be introduced would establish a work search requirement mandating individuals who draw weekly unemployment benefits to provide documentation to the Alabama Department of Labor proving that they actively searched for employment at least five times a week. Under existing law, the current requirement mandates individuals to search for work opportunities once a week. Orr will sponsor the bill in the Senate.

Garrett, chair of the House Ways and Means Education Committee, is the sponsor of House Bill 135. The legislation would provide a $15 million appropriation from the Education Trust Fund to the Alabama Community College System for the newly established Innovation Center. The center will provide workforce training skills in high-demand job sectors. Orr, chairman of the Senate Finance and Taxation Education Committee, will carry the bill in the upper chamber.

State Rep. Paul Lee (R-Dothan) will sponsor a bill to clarify that businesses providing rental or leasing services will not be required to obtain a business license in each municipality in which its equipment or inventory is rented or leased.

According to the lieutenant governor’s office, included in the legislative package will be a repeal of the $100 minimum business privilege tax levied on certain corporations, business trusts, limited liability companies and other entities.

An already-passed bill that the commission included in its legislative package was a $79.5 million appropriation to replenish the unemployment trust fund. The appropriation was included in the $772 ARPA pandemic relief spending plan approved by the legislature and signed into law last week. The legislation avoided a 29% tax increase for employers in 2022.

Dylan Smith is a staff writer for Yellowhammer News. You can follow him on Twitter @DylanSmithAL

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