Alabama 2024 Regular Session

Alabama Senate Bill SB297 Compare Versions

Version 1 (Old)

Version 2 (New)

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3	3		SB297
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	4	+	VXCJLVP-2
5	5		By Senator Melson
6	6		RFD: Finance and Taxation General Fund
7	7		First Read: 04-Apr-24
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12		-	5 SB297 ~~Enrolled~~
	12	+	5 SB297 Engrossed
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14	14		First Read: 04-Apr-24
15		-	Enrolled, An Act,
	15	+	A BILL
	16	+	TO BE ENTITLED
	17	+	AN ACT
16	18		Relating to state income tax for individuals; to amend
17	19		Section 40-18-14, as last amended by Act 2023-421, 2023
18	20		Regular Session, Code of Alabama 1975; to exclude net capital
19	21		gains derived from the exchange of precious metal bullion from
20	22		state income taxes.
21	23		BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
22	24		Section 1. This act shall be known and may be cited as
23	25		the Sound Money Tax Neutrality Act.
24	26		Section 2. Section 40-18-14, as last amended by Act
25	27		2023-421, 2023 Regular Session, Code of Alabama 1975, is
26	28		amended to read as follows:
27	29		"§40-18-14
28	30		(a) The term "gross income" as used herein:
29	31		(1) Includes gains, profits and income derived from
30	32		salaries, wages, or compensation for personal services of
31	33		whatever kind, or in whatever form paid, including the
32	34		salaries, income, fees, and other compensation of state,
33	35		county, and municipal officers and employees, or from
34	36		professions, vocations, trades, business, commerce or sales,
35	37		or dealings in property whether real or personal, growing out
36	38		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
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	68	+	of ownership or use of or interest in such property; also from
	69	+	interest, royalties, rents, dividends, securities, or
	70	+	transactions of any business carried on for gain or profit and
	71	+	the income derived from any source whatever, including any
	72	+	income not exempted under this chapter and against which
71	73		income there is no provision for a tax. The term "gross
72	74		income" as used herein also includes alimony and separate
73	75		maintenance payments to the extent they are includable in
74	76		gross income for federal income tax purposes under 26 U.S.C. §
75	77		71, relating to alimony and separate maintenance payments. The
76	78		term "gross income" as used herein also includes any amount
77	79		included in gross income under 26 U.S.C. § 83 at the time it
78	80		is so included under 26 U.S.C. § 83.
79	81		(2) For purposes of this chapter, the reductions in tax
80	82		attributes required by 26 U.S.C. § 108 shall be applied only
81	83		to the net operating losses determined under this chapter and
82	84		the basis of depreciable property. The basis reductions of
83	85		depreciable property shall not exceed the basis reductions for
84	86		federal income tax purposes. All other tax attribute
85	87		reductions required by 26 U.S.C. § 108 shall not be
86	88		recognized.
87	89		(3) Gross income does not include the following items
88	90		which shall be exempt from income tax under this chapter:
89	91		a. Amounts received under life insurance policies and
90	92		contracts paid by reason of the death of the insured in
91	93		accordance with 26 U.S.C. § 101;
92	94		b. Amounts received, other than amounts paid by reason
93	95		of the death of the insured, under life insurance, endowment
94	96		or annuity contracts, determined in accordance with 26 U.S.C.
95		-	§ 72;
96		-	c. The value of property acquired by gift, bequest,
97		-	devise, or descent, but the income from such property shall be
98		-	included in the gross income, in accordance with 26 U.S.C. §
99		-	102;
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	126	+	or annuity contracts, determined in accordance with 26 U.S.C.
	127	+	§ 72;
	128	+	c. The value of property acquired by gift, bequest,
	129	+	devise, or descent, but the income from such property shall be
	130	+	included in the gross income, in accordance with 26 U.S.C. §
129	131		102;
130	132		d. Interest upon obligations of the United States or
131	133		its possessions; or securities issued under provisions of the
132	134		Federal Farm Loan Act of July 18, 1916;
133	135		e. Any amounts received by an individual which are
134	136		excludable from gross income under 26 U.S.C. § 104, relating
135	137		to compensation for injuries or sickness, or 26 U.S.C. § 105,
136	138		relating to amounts received under accident or health plans;
137	139		f. Interest on obligations of the State of Alabama and
138	140		any county, municipality, or other political subdivision
139	141		thereof;
140	142		g. The rental value of a parsonage provided to a
141	143		minister of the gospel to the extent excludable under 26
142	144		U.S.C. § 107;
143	145		h. Income from discharge of indebtedness to the extent
144	146		allowed by 26 U.S.C. § 108;
145	147		i. For each individual resident taxpayer, or each
146	148		husband and wife filing a joint income tax return, as the case
147	149		may be, any gain realized from the sale of a personal
148	150		residence of the taxpayer shall be excluded to the extent
149	151		excludable for federal income tax purposes under 26 U.S.C. §
150	152		121;
151	153		j. Contributions made by an employer on behalf of an
152	154		employee to a trust which is part of a qualified cash or
153		-	deferred arrangement, as defined in 26 U.S.C. § 401(k)(2) or 5
154		-	U.S.C. § 8437, under which the employee has an election
155		-	whether the contribution will be made to the trust or received
156		-	by the employee in cash and contributions made by an employer
157		-	for an employee for an annuity contract, which contributions
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	182	+	84 SB297 Engrossed
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	184	+	employee to a trust which is part of a qualified cash or
	185	+	deferred arrangement, as defined in 26 U.S.C. § 401(k)(2) or 5
	186	+	U.S.C. § 8437, under which the employee has an election
	187	+	whether the contribution will be made to the trust or received
	188	+	by the employee in cash and contributions made by an employer
187	189		for an employee for an annuity contract, which contributions
188	190		would be excludable from the gross income, for federal income
189	191		tax purposes, of the employee in accordance with the
190	192		provisions of 26 U.S.C. § 403(b). The limitations imposed by
191	193		26 U.S.C. § 402(g) shall apply for purposes of this paragraph;
192	194		k. Amounts that an employee is allowed to exclude from
193	195		gross income for federal income tax purposes pursuant to 26
194	196		U.S.C. § 125, relating to cafeteria plans, and 26 U.S.C. §
195	197		132,relating to certain fringe benefits; and
196	198		l. Amounts paid or incurred by an employer on behalf of
197	199		an employee if the amounts may be excluded from gross income
198	200		for federal income tax purposes by an employee pursuant to 26
199	201		U.S.C. § 129, relating to dependent care expenses.
200	202		m.1. Amounts received by a full-time hourly waged paid
201	203		employee as compensation for work performed in excess of 40
202	204		hours in a week.
203	205		2. The exemption provided pursuant to this paragraph
204	206		shall be available for tax years that begin after December 31,
205	207		2023, and end prior to June 30, 2025.
206	208		3. Each employer shall submit to the Department of
207	209		Revenue, on forms prescribed by the department, all of the
208	210		following:
209	211		(i) For the tax year beginning January 1, 2023, the
210	212		total amount received by full-time hourly wage-paid employees
211		-	as compensation for work performed in excess of 40 hours in a
212		-	week and the total number of employees for which it was paid.
213		-	The data shall be due no later than January 31, 2024.
214		-	(ii) For the tax year beginning on or after January 1,
215		-	2024, and each tax year thereafter, the total amount received
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	242	+	total amount received by full-time hourly wage-paid employees
	243	+	as compensation for work performed in excess of 40 hours in a
	244	+	week and the total number of employees for which it was paid.
	245	+	The data shall be due no later than January 31, 2024.
	246	+	(ii) For the tax year beginning on or after January 1,
245	247		2024, and each tax year thereafter, the total amount received
246	248		by full-time hourly wage-paid employees as compensation for
247	249		work performed in excess of 40 hours in a week and the total
248	250		number of employees for which it was paid. The data shall be
249	251		provided monthly or quarterly and shall be due no later than
250	252		the due date for the corresponding monthly or quarterly
251	253		withholding tax returns.
252	254		(iii) Additional information as may be required by the
253	255		department.
254	256		4. The department shall report to the Legislative
255	257		Services Agency - Fiscal Division and the Department of
256	258		Finance the data collected and compiled pursuant to
257	259		subparagraph 3. no later than 30 days after the due date of
258	260		such data.
259	261		n. Any net capital gain derived from the exchange of
260	262		precious metal bullion. For purposes of this paragraph,
261	263		"precious metal bullion" means coins, bars or rounds
262	264		containing primarily refined gold, silver, platinum, or
263	265		palladium that is marked and valued primarily by its weight,
264	266		purity, and content.
265	267		(4) The term "gross income," in the case of a resident
266	268		individual, includes income from sources within and outside
267	269		Alabama, including without limitation, the resident's
268	270		proportionate share of any income arising from a Subchapter K
269		-	entity, Alabama S corporation, or estate or trust, regardless
270		-	of the geographic source of the income. The term gross income,
271		-	in the case of a nonresident individual, includes only income
272		-	from property owned or business transacted in Alabama. For
273		-	purposes of this article, proportionate share shall be defined
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	300	+	proportionate share of any income arising from a Subchapter K
	301	+	entity, Alabama S corporation, or estate or trust, regardless
	302	+	of the geographic source of the income. The term gross income,
	303	+	in the case of a nonresident individual, includes only income
	304	+	from property owned or business transacted in Alabama. For
303	305		purposes of this article, proportionate share shall be defined
304	306		by reference to (i) the status of the individual owner as a
305	307		partner or member of a Subchapter K entity, shareholder of an
306	308		Alabama S corporation, or beneficiary of an estate or trust,
307	309		and (ii) the allocable interest in that entity owned by the
308	310		individual.
309	311		(b) The Department of Revenue may adopt rules to
310	312		provide for the administration of this section."
311	313		Section 3. This act shall become effective on January
312	314		1, 2025.
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323		-	1, 2025.
324		-	________________________________________________
325		-	President and Presiding Officer of the Senate
326		-	________________________________________________
327		-	Speaker of the House of Representatives
328		-	SB297
329		-	Senate 30-Apr-24
330		-	I hereby certify that the within Act originated in and passed
331		-	the Senate, as amended.
332		-	Patrick Harris,
333		-	Secretary.
334		-	House of Representatives
335		-	Passed: 07-May-24
336		-	By: Senator Melson
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	328	+	154 SB297 Engrossed
	329	+	Page 7
	330	+	1, 2025.
	331	+	Senate
	332	+	Read for the first time and referred
	333	+	to the Senate committee on Finance
	334	+	and Taxation General Fund
	335	+	................04-Apr-24
	336	+	Read for the second time and placed
	337	+	on the calendar:
	338	+	0 amendments
	339	+	................25-Apr-24
	340	+	Read for the third time and passed
	341	+	as amended
	342	+	Yeas 34
	343	+	Nays 0
	344	+	Abstains 0
	345	+	................30-Apr-24
	346	+	Patrick Harris,
	347	+	Secretary.
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