Alabama 2023 Regular Session

Alabama House Bill HB217 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~HB217ENROLLED~~
	1	+	HB217INTRODUCED
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3		-	GYIF66-3
	3	+	GYIF66-1
4	4		By Representatives Daniels, Ledbetter, Garrett, Chestnut,
5	5		Lawrence, Bracy, Drummond, Warren, Whitt, Faulkner, Colvin,
6	6		Clarke, Woods, Jones, Plump, Moore (M), Hollis, Boyd, Travis,
7	7		Stubbs, Starnes, Reynolds, Mooney, Harrison
8	8		RFD: Ways and Means Education
9	9		First Read: 23-Mar-23
10		-	2023 Regular Session
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18		-	8 ~~HB217 EnrolledHB217 Enrolled~~
	17	+	8 GYIF66-1 03/02/2023 RA (L)RA 2023-571
19	18		Page 1
20		-	Enrolled, An Act,
	19	+	SYNOPSIS:
	20	+	Under existing law, gross income is defined for
	21	+	the purpose of state income tax. Also existing law
	22	+	exempts certain amounts from the calculation of gross
	23	+	income.
	24	+	This bill would exclude work performed in
	25	+	excess of 40 hours in any week from being included in
	26	+	the calculation of gross income.
	27	+	A BILL
	28	+	TO BE ENTITLED
	29	+	AN ACT
21	30		Relating to gross income; to amend Section 40-18-14,
22	31		Code of Alabama 1975; to exclude hours worked above 40 in any
23	32		given week from gross income.
24	33		BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
25	34		Section 1. Section 40-18-14, Code of Alabama 1975, is
26	35		amended to read as follows:
27	36		"§40-18-14
28	37		(a) The term "gross income" as used herein:
29	38		(1) Includes gains, profits and income derived from
30	39		salaries, wages, or compensation for personal services of
31	40		whatever kind, or in whatever form paid, including the
32		-	salaries, income, fees, and other compensation of state,
33		-	county, and municipal officers and employees, or from
34		-	professions, vocations, trades, business, commerce or sales,
35		-	or dealings in property whether real or personal, growing out
36		-	of ownership or use of or interest in such property; also from
37		-	interest, royalties, rents, dividends, securities, or
38		-	transactions of any business carried on for gain or profit and
39		-	the income derived from any source whatever, including any
40		-	income not exempted under this chapter and against which
41		-	income there is no provision for a tax. The term "gross
42		-	income" as used herein also includes alimony and separate
43		-	maintenance payments to the extent they are includable in
44		-	gross income for federal income tax purposes under 26 U.S.C. §
45		-	71 (relating to alimony and separate maintenance payments).
46		-	The term "gross income" as used herein also includes any
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74		-	28 HB217 ~~EnrolledHB217 Enrolled~~
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	70	+	salaries, income, fees, and other compensation of state,
	71	+	county, and municipal officers and employees, or from
	72	+	professions, vocations, trades, business, commerce or sales,
	73	+	or dealings in property whether real or personal, growing out
	74	+	of ownership or use of or interest in such property; also from
	75	+	interest, royalties, rents, dividends, securities, or
	76	+	transactions of any business carried on for gain or profit and
	77	+	the income derived from any source whatever, including any
	78	+	income not exempted under this chapter and against which
	79	+	income there is no provision for a tax. The term "gross
	80	+	income" as used herein also includes alimony and separate
	81	+	maintenance payments to the extent they are includable in
	82	+	gross income for federal income tax purposes under 26 U.S.C. §
	83	+	71 (relating to alimony and separate maintenance payments).
	84	+	The term "gross income" as used herein also includes any
76	85		amount included in gross income under 26 U.S.C. § 83 at the
77	86		time it is so included under 26 U.S.C. § 83.
78	87		(2) For purposes of this chapter, the reductions in tax
79	88		attributes required by 26 U.S.C. § 108 shall be applied only
80	89		to the net operating losses determined under this chapter and
81	90		the basis of depreciable property. The basis reductions of
82	91		depreciable property shall not exceed the basis reductions for
83	92		federal income tax purposes. All other tax attribute
84	93		reductions required by 26 U.S.C. § 108 shall not be
85	94		recognized.
86	95		(3) Gross income does not include the following items
87	96		which shall be exempt from income tax under this chapter:
88	97		a. Amounts received under life insurance policies and
89		-	contracts paid by reason of the death of the insured in
90		-	accordance with 26 U.S.C. § 101;
91		-	b. Amounts received, other than amounts paid by reason
92		-	of the death of the insured, under life insurance, endowment
93		-	or annuity contracts, determined in accordance with 26 U.S.C.
94		-	§ 72;
95		-	c. The value of property acquired by gift, bequest,
96		-	devise, or descent, but the income from such property shall be
97		-	included in the gross income, in accordance with 26 U.S.C. §
98		-	102;
99		-	d. Interest upon obligations of the United States or
100		-	its possessions; or securities issued under provisions of the
101		-	Federal Farm Loan Act of July 18, 1916;
102		-	e. Any amounts received by an individual which are
103		-	excludable from gross income under 26 U.S.C. § 104 (relating
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	125	+	56 HB217 INTRODUCEDHB217 INTRODUCED
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	127	+	contracts paid by reason of the death of the insured in
	128	+	accordance with 26 U.S.C. § 101;
	129	+	b. Amounts received, other than amounts paid by reason
	130	+	of the death of the insured, under life insurance, endowment
	131	+	or annuity contracts, determined in accordance with 26 U.S.C.
	132	+	§ 72;
	133	+	c. The value of property acquired by gift, bequest,
	134	+	devise, or descent, but the income from such property shall be
	135	+	included in the gross income, in accordance with 26 U.S.C. §
	136	+	102;
	137	+	d. Interest upon obligations of the United States or
	138	+	its possessions; or securities issued under provisions of the
	139	+	Federal Farm Loan Act of July 18, 1916;
	140	+	e. Any amounts received by an individual which are
	141	+	excludable from gross income under 26 U.S.C. § 104 (relating
133	142		to compensation for injuries or sickness) or 26 U.S.C. § 105
134	143		(relating to amounts received under accident or health plans);
135	144		f. Interest on obligations of the State of Alabama and
136	145		any county, municipality, or other political subdivision
137	146		thereof;
138	147		g. The rental value of a parsonage provided to a
139	148		minister of the gospel to the extent excludable under 26
140	149		U.S.C. § 107;
141	150		h. Income from discharge of indebtedness to the extent
142	151		allowed by 26 U.S.C. § 108;
143	152		i. For each individual resident taxpayer, or each
144	153		husband and wife filing a joint income tax return, as the case
145	154		may be, any gain realized from the sale of a personal
146		-	residence of the taxpayer shall be excluded to the extent
147		-	excludable for federal income tax purposes under 26 U.S.C. §
148		-	121;
149		-	j. Contributions made by an employer on behalf of an
150		-	employee to a trust which is part of a qualified cash or
151		-	deferred arrangement (as defined in 26 U.S.C. § 401(k)(2), or
152		-	5 U.S.C. § 8437) under which the employee has an election
153		-	whether the contribution will be made to the trust or received
154		-	by the employee in cash and contributions made by an employer
155		-	for an employee for an annuity contract, which contributions
156		-	would be excludable from the gross income (for federal income
157		-	tax purposes) of the employee in accordance with the
158		-	provisions of 26 U.S.C. § 403(b). The limitations imposed by
159		-	26 U.S.C. § 402(g) shall apply for purposes of this paragraph;
160		-	k. Amounts that an employee is allowed to exclude from
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	184	+	residence of the taxpayer shall be excluded to the extent
	185	+	excludable for federal income tax purposes under 26 U.S.C. §
	186	+	121;
	187	+	j. Contributions made by an employer on behalf of an
	188	+	employee to a trust which is part of a qualified cash or
	189	+	deferred arrangement (as defined in 26 U.S.C. § 401(k)(2), or
	190	+	5 U.S.C. § 8437) under which the employee has an election
	191	+	whether the contribution will be made to the trust or received
	192	+	by the employee in cash and contributions made by an employer
	193	+	for an employee for an annuity contract, which contributions
	194	+	would be excludable from the gross income (for federal income
	195	+	tax purposes) of the employee in accordance with the
	196	+	provisions of 26 U.S.C. § 403(b). The limitations imposed by
	197	+	26 U.S.C. § 402(g) shall apply for purposes of this paragraph;
	198	+	k. Amounts that an employee is allowed to exclude from
190	199		gross income for federal income tax purposes pursuant to 26
191	200		U.S.C. § 125 (relating to cafeteria plans) and 26 U.S.C. § 132
192	201		(relating to certain fringe benefits); and
193	202		l. Amounts paid or incurred by an employer on behalf of
194	203		an employee if the amounts may be excluded from gross income
195	204		for federal income tax purposes by an employee pursuant to 26
196	205		U.S.C. § 129 (relating to dependent care expenses).
197		-	m~~. 1~~. Amounts received by a full-time hourly waged paid
	206	+	m. Amounts received by a full-time hourly waged paid
198	207		employee as compensation for work performed in excess of 40
199	208		hours in a week.
200		-	2. The exemption provided pursuant to this paragraph
201		-	shall be available for tax years that begin after December 31,
202		-	2023, and end prior to January 1, 2027.
203		-	3. The Department of Revenue shall adopt rules to
204		-	ensure that no more than $25 million, annually, in aggregate
205		-	income taxes otherwise due from all taxpayers is exempt from
206		-	income tax pursuant to this paragraph.
207	209		(4) The term "gross income," in the case of a resident
208	210		individual, includes income from sources within and outside
209	211		Alabama, including without limitation, the resident's
210		-	proportionate share of any income arising from a Subchapter K
211		-	entity, Alabama S corporation, or estate or trust, regardless
212		-	of the geographic source of the income. The term gross income,
213		-	in the case of a nonresident individual, includes only income
214		-	from property owned or business transacted in Alabama. For
215		-	purposes of this article, proportionate share shall be defined
216		-	by reference to (i) the status of the individual owner as a
217		-	partner or member of a Subchapter K entity, shareholder of an
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	241	+	proportionate share of any income arising from a Subchapter K
	242	+	entity, Alabama S corporation, or estate or trust, regardless
	243	+	of the geographic source of the income. The term gross income,
	244	+	in the case of a nonresident individual, includes only income
	245	+	from property owned or business transacted in Alabama. For
	246	+	purposes of this article, proportionate share shall be defined
	247	+	by reference to (i) the status of the individual owner as a
	248	+	partner or member of a Subchapter K entity, shareholder of an
247	249		Alabama S corporation, or beneficiary of an estate or trust,
248	250		and (ii) the allocable interest in that entity owned by the
249	251		individual.
250	252		(b) The Department of Revenue may adopt rules to
251	253		provide for the administration of the provisions of this
252	254		section."
253		-	Section 2. This act shall become effective on January
	255	+	Section 2. The provisions of this act are applicable to
	256	+	all tax years beginning after December 31, 2023.
	257	+	Section 3. This act shall become effective on January
254	258		1, 2024, following its passage and approval by the Governor,
255	259		or its otherwise becoming law.
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266		-	________________________________________________
267		-	Speaker of the House of Representatives
268		-	________________________________________________
269		-	President and Presiding Officer of the Senate
270		-	House of Representatives
271		-	I hereby certify that the within Act originated in and
272		-	was passed by the House 02-May-23, as amended.
273		-	John Treadwell
274		-	Clerk
275		-	Senate 01-Jun-23 Passed
276		-	House 01-Jun-23 Concurred in
277		-	Senate Amendment
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