By Brandon Moseley
Alabama Political Reporter
On Tuesday, March 3, the Alabama House of Representatives approved the Alabama Senate’s version of the “Alabama Taxpayers’ Bill of Rights II,” sponsored by State Representative Paul DeMarco (R) from Homewood.
The Alabama Taxpayer Bill of Rights II sets up an independent tribunal to hear taxpayers’ appeals of both state and local tax assessments and ensures fairness throughout. The bill was included in the Alabama House Republican Caucus’ “Commonsense Conservative Agenda” which was announced prior to the start of the session.
State Representative Paul DeMarco said before the Alabama House of Representatives on Tuesday. March 3 that the Alabama Senate had passed a substitute bill for the version of HB 105 which had passed House earlier.
The biggest change made by the Senate is that the Senate version creates a tax tribunal appointed by the Governor. Originally the tribunal was appointed by a nominating committee. Rep. DeMarco said that the Senate also made a number of changes to some of the additions outside of the tribunal. The Senate reduced the failure to pay penalty, does not extend the statute of limitations to 3 years, and other changes.
Rep. John Knight (D) from Montgomery asked, “Is it still a taxpayer bill of rights?”
Rep. DeMarco said, “Yes, it still has a tribunal. It is still a taxpayer’s bill of rights, but it does not have all the changes I would like to see.” “We have done this four years in a row. Don’t let the perfect be the enemy of the good.” “I am satisfied that this gets us where we need to be.”
Rep. Knight asked, “What is the rationale of changing the appointing authority?”
Rep. DeMarco said, “I like the nominating committee. You had someone from the cities, the counties, and the Alabama department of revenue…I like the idea of a nominating committee. The Senate decided to let the governor make the appointments. I am willing to agree to that to get it passed.”
Rep. DeMarco said that other states have used the lack of an independent appeals process against Alabama in recruiting businesses and industries.
The House voted to concur with the Senate’s changes.
Rep. DeMarco said in a written statement, “This bill will ensure that businesses and individual taxpayers choosing to appeal tax assessments are given a level playing field and referees who will remain neutral from the beginning of the process to the end. This bill can be summed up in two words that are at the core of its intent – simple fairness.”
Under the provisions of Rep. DeMarco’s legislation, the appeals process for tax assessments will be streamlined and made independent of the government authorities that are doing the taxing since those authorities all have a vested interest in denying any such appeals.
The Act would create an independent Alabama Tax Appeals Commission which would be tasked with hearing disputes over assessments involving income, privilege, sales, use, rental and lodging taxes issued by the State Department of Revenue, by cities or counties, or by private auditing firms employed by those agencies.
State Representative Jim McClendon (R) from Springville said, “Today when you appeal your issue the hearing is held by an employee of the department of revenue we are trying to get that moved out.”
To avoid costly duplication, the bill also abolishes the Administrative Law Division of the Department of Revenue and transfers its budget, personnel, equipment and functions to the newly-formed Tax Appeals Commission. This would bring Alabama into conformity with the vast majority of states that have created an independent tax appeals process for both businesses and individuals.
This bill was endorsed by both the American Bar Association and the American Institute of CPAs.
This legislation would save both administrative costs and legal fees for Alabama taxpayers pursuing an appeal of their tax bill. Decisions made by the Commission could still be appealed to the circuit courts, as current law allows.
The Alabama House Republican Caucus says that the bill also makes several other pro-taxpayer changes including increasing protections for “innocent spouses” and lengthening the appeal time for taxpayers from 30 days to 60 days.
DeMarco’s Taxpayer Bill of Rights II Act is part of a set of bills prioritized in the House Republican Caucus’ Commonsense Conservative Agenda. According to the Alabama House Republican Caucus their agenda, “…includes pro-business, economic development, and tax relief measures, as well as other bills addressing important social issues like protecting unborn life and preserving personal religious and moral freedoms from federal mandates.”
The bill now moves to the governor for his consideration.
This will be the last year that Representative Paul DeMarco serves in the Alabama House. The Homewood state representative is running for the Sixth District Congressional District where longtime incumbent Spencer Bachus is retiring at the end of the year.
