MONTGOMERY — The Alabama House of Representatives on Thursday passed two bills that are top priorities for state leaders.
The House passed one bill that exempts from state taxes the $1,200 and $600 coronavirus relief payments most Alabamians received from the federal government in the last year.
The chamber also passed a bill extending two economic development programs that have been used frequently in recent years to recruit business to the state.
Each measure was mentioned by Alabama Governor Kay Ivey in her State of the State address on Tuesday and have the support of leadership in both chambers of the legislature.
Sponsored by Rep. Danny Garrett (R-Trussville), HB170 is the legislation that would make coronavirus relief money, both stimulus checks and any other form of direct federal assistance, exempt from taxes at the state level.
The National Federation of Independent Businesses (NFIB) strongly supported the measure. “House Bill 170 would let small business owners avoid a ‘surprise tax’ on COVID-19 recovery payments,” explained NFIB State Director for Alabama Rosemary Elebash on Thursday.
HB 170 was amended on Thursday to include as tax-exempt any coronavirus relief the federal government approves in 2021.
The bill also contains several technical changes to the way the state collects some forms of corporate taxation. Garrett, in public remarks over the last week, has said that the changes would shift some tax burden out of state and make the state’s tax code more compliable with the federal government’s 2017 Tax Cuts and Jobs Act.
In a fiscal note publicly released, the Legislative Services Agency estimated the bill will ultimately increase state tax revenues by over $12 million a year. Rep. Andy Whitt (R-Harvest) cosponsored the legislation, which passed the House by a vote of 94-0.
The other major bill passed by the House on Thursday was HB192 from Rep. Bill Poole (R-Tuscaloosa), a measure that would extend and update two incentive programs — the Alabama Jobs Act and Growing Alabama tax credits — that economic development officials across Alabama have praised for their effectiveness in aiding the recruitment of new business for the state.
Gov. Ivey considered both programs important enough to the functioning of the state that she used executive authority to unilaterally extend them in the last days of 2020.
Among the many enhancements, the bill makes to the incentives are more credits for pharmaceutical and medical research; more credits for rural, minority and female-owned businesses; and more credits for projects related to Alabama’s port in Mobile.
The incentive programs extended by the bill would sunset on July 31, 2023. Poole said Thursday the reason for that date is so the next legislature — the one to be elected in November 2022 that will begin meeting in January 2023 — can have a say in the future of the programs.
House members voted 94-1 in favor of the bill’s passage.
Both bills now head to the Senate next, where they are expected to make quick progress towards the governor’s desk.
Henry Thornton is a staff writer for Yellowhammer News. You can contact him by email: [email protected] or on Twitter @HenryThornton95.
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