Tuesday, the Alabama Senate granted unanimous approval to legislation providing tax relief for low-income earners and retirees.
If passed by the lower chamber and signed into law, Senate Bill 19, sponsored by State Sen. Arthur Orr (R-Decatur), would hold an estimated annual reduction of $17.23 million.
According to a release, the optional standard deduction for married taxpayers filing jointly would increase by $1,000. For those who file married filing separate, single and head of family, the optional standard deduction would increase by $500.
If enacted, the adjusted gross income range allowable for the maximum optional standard deduction would increase from $33,000 to $35,000. The adjusted gross income range allowable for dependent exemption would increase from $20,000 to $50,000. This would raise the threshold upon which the state taxes individual income.
According to Orr, the healthy condition of the state’s budgets had paved the way for the upper to pass tax relief legislation.
“We are in a very good place with our state budgets – the best since the recession hit in 2007,” stated Orr. “Because of the legislature’s fiscally conservative and responsible budgeting approach over the past decade and with the recent federal pandemic relief dollars flowing into the state, there is real potential to provide these important tax cuts that otherwise we would not be able to propose.”
Orr advised that the current inflation crisis necessitated lawmakers’ move to ease the tax burden levied upon low-income earners and retirees on fixed income.
“Inflation is at a nearly 40-year high, and the rising prices make it difficult for several struggling families to afford groceries, gas, and necessities,” he added. “While individuals are spending more money on these everyday items, the state is directly benefitting from it. It’s critical that lawmakers make a significant effort to support Alabamians when we have the means to do so. I appreciate the support from my colleagues on this effort, and I look forward to this bill’s passage in the House so that we can send money back to hardworking Alabamians.”
Senate Bill 19 will now head to the Alabama House of Representatives, where it is carried by State Rep. Lynn Greer (R-Rogersville).
Dylan Smith is a staff writer for Yellowhammer News. You can follow him on Twitter @DylanSmithAL