Lieutenant Governor Will Ainsworth announced on Wednesday the legislative package of the Alabama Small Business Commission, which is chaired by State Rep. Danny Garrett, R-Trussville, and falls under the statutory authority of the lieutenant governor’s office.
The package includes tax cuts, tax exemptions, paperwork reductions, and other adjustments that benefit both small business employers and employees.
“Alabama is experiencing its lowest unemployment and best economy in history, and the bills in this package will help small businesses continue to thrive, expand, and provide new opportunities,” Ainsworth said. “Rep. Garrett and the members of the Alabama Small Business Commission deserve the thanks of all Alabamians for their hard work, and I fully endorse the legislative package they have crafted.”
Among the bills in the legislative agenda are:
- An income tax exemption for the first $10,000 of proceeds from a 401(k) or IRA for those 65 or older. Senate Bill 18 is sponsored by Sen. Arthur Orr, R – Decatur, and carried in the House by Rep. Lynn Green, R – Rogersville.
- A tax cut that increases the threshold for the maximum dependent exemption from $20,000 to $50,000; adjusts gross income floor for the optional standard deduction for taxpayers that are married filing jointly, head of family, and single from $23,000 to $25,500 and from $10,500 to $12,750 for taxpayers that are married filing separate; and moves the standard deduction amount from $4,000 to $5,000 for taxpayers that are married filing jointly and from $2,000 to $2,500 for taxpayers that are married filing separate, head of family and single. Senate Bill 19 is sponsored by Orr and carried by Greer.
- A state income tax exemption for those who received federal child tax credits, earned income tax credits, and child and dependent tax credits under the American Rescue Plan Act. House Bill 147 is sponsored by State Rep. Jim Carns, R – Birmingham, and carried in the Senate by Sen. Dan Roberts, R – Mountain Brook.
- An ad valorem tax exemption of up to $40,000 on the market value of business tangible personal property, which would provide businesses with a tax cut and reduce paperwork. House Bill 82 is sponsored by State Rep. Danny Garrett, R – Trussville.
- The creation of a “seasonal worker” classification that exempts employers from paying unemployment taxes on those individuals. The change would be especially helpful to businesses in the hospitality industry and retailers operating during holiday seasons. Senate Bill 100 is sponsored by Sen. Chris Elliott, R – Daphne.
- A work search requirement mandating that those drawing weekly unemployment benefits must provide the Alabama Department of Labor with documentation that they searched for work opportunities at least five times a week. The current requirement is once a week. Orr will sponsor that bill, which has not yet been introduced.
- A $15 million appropriation from the Education Trust Fund to the Alabama Community College System for the newly established Innovation Center, which will provide workforce training skills in high-demand job sectors. House Bill 135 is sponsored by Garrett, who chairs the Ways and Means Education Committee, and carried in the Senate by Orr, who chairs the Finance and Taxation Education Committee.
- A clarification that businesses providing rental or leasing services will not be required to obtain a business license in each municipality in which its equipment or inventory is rented or leased. State Rep. Paul Lee, R – Dothan, will sponsor the legislation, which has not yet been introduced.
- A repeal of the $100 minimum business privilege tax levied on certain corporations, business trusts, limited liability companies, and other entities.
The Alabama Small Business Commission legislative package also included an appropriation of $79.5 million to replenish the unemployment trust fund to the pre-pandemic balance, which avoids a 29 percent tax increase for employers in 2022. That appropriation was successfully approved and enacted during the recent special legislative session on ARPA funding.
