Municipalities, business license tax, gross receipts for purpose of tax does not include excise taxes by federal, state, and local government.
Impact
By permitting businesses to exclude excise taxes from their gross receipts, SB38 aims to create a more favorable taxation environment for local enterprises. This could significantly affect local revenue collected through business licenses, altering the financial landscape for municipalities that rely on this form of taxation. Supporters of the bill argue that it could encourage business growth and operational efficiency, while opponents may express concern about the potential loss of local revenue, which is critical for funding public services and maintaining local infrastructure.
Summary
SB38, introduced by Senator Allen, proposes amendments to the Alabama Code, specifically targeting the municipal business license tax framework. The key objective of this bill is to revise the definition of 'gross receipts' for businesses operating within municipalities. Under the current law, municipalities can impose a business license tax calculated based on a business's gross receipts. However, this bill seeks to allow businesses to deduct excise taxes—levied by federal, state, or local governments—from their gross receipts before calculating their tax liability. This is intended to relieve businesses from incurring a tax burden on taxes they have already paid and remitted to the government.
Contention
While the bill has garnered support for its pro-business stance, it has also raised points of contention among some legislators and community members. Critics argue that allowing deductions for excise taxes could lead municipalities into financial shortfalls, given that local governments often depend on business license taxes for essential services. There is a concern that the bill could undermine local authority over taxation and reduce the incentive for businesses to contribute to their communities. As SB38 moves forward, discussions around its implications on local revenue will likely play a crucial role in its legislative journey.
Municipalities, business license tax on gross receipts, gross receipts not to include any other taxes on gasoline or motor fuels, Sec. 11-51-90.1 am'd.
Relating to municipalities; to amend Section 11-51-90.1, Code of Alabama 1975, relating to the municipal business license tax; to specify that the definition of gross receipts does not include any excise tax imposed by the federal, state, and local governments.
Relating to municipalities; to amend Section 11-51-90.1, Code of Alabama 1975, relating to the municipal business license tax; to specify that the definition of gross receipts does not include any excise tax imposed by the federal, state, and local governments.
Eliminates requirement that taxpayer that qualifies as S corporation for federal tax purposes affirmatively elect New Jersey S corporation status for purposes of corporation business and gross income taxes.
To amend Sections 40-23-1 and 40-23-4, as last amended by Act 2022-291, Act 2022-293, Act 2022-373, and Act 2022-199, 2022 Regular Session, Code of Alabama 1975, related to sales taxes; to define food and exempt sales of food from state sales and use taxes; to establish the local sales tax rate on food for purposes of county and municipal sales and use taxes as the existing general or retail local sales tax rate; and to allow a local governing body to reduce the local sales tax rate or exempt food from local sales and use taxes.
Direct shippers of wine regulated; sales and use taxes, liquor gross receipts taxes, and excise taxes imposed on direct shipments of wine; licensing provided; classification of data provided; and reports required.