HB219INTRODUCED
Page 0
HB219
AP5T7S7-1
By Representative Pettus
RFD: Ways and Means Education
First Read: 06-Feb-25
1
2
3
4
5 AP5T7S7-1 1/23/2025 JF (F)DJ 2024-3043
Page 1
First Read: 06-Feb-25
SYNOPSIS:
Under current law, certain compensation for
active service members of the United States Armed
Forces is not subject to state income tax.
This bill would expand this exemption to include
certain compensation of civilian employees of the U.S.
Department of Defense and Armed Forces.
A BILL
TO BE ENTITLED
AN ACT
Relating to income tax; to amend Section 40-18-3, Code
of Alabama 1975, as last amended by Act 2024-170 of the 2024
Regular Session, to exempt certain compensation of civilian
employees of the U.S. Department of Defense and Armed Forces
from state income tax.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-18-3, Code of Alabama 1975, as
last amended by Act 2024-170 of the 2024 Regular Session, is
amended to read as follows:
"ยง40-18-3
(a) The salaries, fees, commissions, or other income of
officers or agents of the United States or its agencies and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 HB219 INTRODUCED
Page 2
officers or agents of the United States or its agencies and
instrumentalities or its contractees, received from the United
States or from its agencies and instrumentalities, shall be
subject to income taxes levied by the State of Alabama as
other income is taxed, but without discrimination, and only to
the same extent and in the same manner as other income is
taxed, insofar as the State of Alabama may be constitutionally
or legally authorized to tax such income ; provided, that .
(b) Notwithstanding subsection (a), money paid by the
United States to a personan individual as compensation as a
civilian employee of the U.S. Department of Defense or Armed
Forces, or for active service as a member of the Armed
Forcesarmed forces of the United States, including members of
the National Guard and Reserve components, shall not be
subject to income taxes levied by the State of Alabama, for
compensation earned while the individual is:
(1) Inin a combat zone designated by executive order of
the President of the United States ,;
(2)Deployeddeployed to locations outside the United
States,; or
(3)Activatedactivated by the Governor of the State of
Alabama or the President of the United States to support state
or federal response to emergencies within or outside of the
United States shall not be subject to income taxes levied by
the State of Alabama ."
Section 2. The provisions of this act apply to tax
years beginning on or after January 1, 2026.
Section 3. This act shall become effective on January
1, 2026.
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56