Passage of a single bill made Alabama’s tax grade jump from ‘D’ to ‘B’

—

January 22, 2015

The Council on State Taxation (COST) released its yearly grades last month and Alabama jumped all the way from a “D” to a “B,” due entirely to the passage of one bill that worked its way through the Alabama Legislature last year and was ultimately signed into law by Gov. Bentley.

In COSTS’s “Best and Worst of State Tax Administration” Scorecard, the Taxpayer Fairness Act was cited as the reason for the drastic improvement in Alabama’s score.

In our December 2013 Scorecard, we noted that ‘Alabama lamentably failed to establish [an
independent tax appeals tribunal] again this year… We hope that 2014 is the year the legislature
will finally push this legislation over the top[.]’ Alabama’s success this year is attributable to
the tireless efforts of longtime sponsor Representative Paul DeMarco; Governor Bentley; lead
architect Bruce Ely, Partner, with assistance from Jimmy Long, Associate, both with Bradley
Arant Boult Cummings LLP in Birmingham; and the Business Council of Alabama. COST was
privileged to work with these public servants and business leaders to accomplish significant and
commendable reform that serves the best interests of Alabama and its citizens.

The Alabama Taxpayer Fairness Act abolished the Department of Revenue’s Administrative Law Division and replaced it with an independent agency called the Alabama Tax Tribunal.

To improve Alabama’s score from a B to an A, COST recommends the state lengthen the amount of time allowed for businesses to file to 30 days after the federal filing date, and making the appeals process more transparent.