MONTGOMERY — The Business Council of Alabama (BCA) has expressed its appreciation to the Alabama Legislature following two priority pieces of legislation that will help the state’s economy bounce back from the effects of the COVID-19 pandemic.
The legislature on Wednesday gave final passage to HB 170 and HB 192.
HB 170, among other tax reform measures through the Business Tax Competitiveness Act, would ensure that federal stimulus funds derived from the CARES Act and subsequent coronavirus relief legislation are not subject to state income taxes. This includes relief funds for businesses through the job-saving Paycheck Protection Program (PPP). That aspect of HB 170 comes through the Alabama Taxpayer Stimulus Freedom Act.
This key piece of legislation received unanimous, bipartisan support from both chambers and is now on the governor’s desk for her signature.
“BCA applauds the legislature for quickly addressing this critical issue early in the legislative session,” stated Katie Boyd Britt, president and CEO of BCA. “Businesses and individuals throughout the state received this pandemic relief funding as a lifeline during these challenging times. Having this relief exempt from state taxes is imperative in allowing these funds to be used for their intended purpose.”
The bill was sponsored by Representative Danny Garrett (R-Trussville) and Senator Dan Roberts (R-Mountain Brook) in their respective chambers.
“The bill excludes all COVID relief payments received by individuals, businesses and non-profit organizations from being subject to Alabama taxes,” said Garrett. “The bill also makes several other important changes that will reduce taxes on businesses operating in the state and make the state of Alabama more attractive for prospective businesses.”
On Wednesday, HB 192 was also sent to the governor’s desk following resounding support across the aisle in both chambers.
HB 192 would renew and improve job creation incentives found in the Alabama Jobs Act and Growing Alabama Act. The legislation was sponsored by Representative Bill Poole (R-Tuscaloosa) and Senate Pro Tem Greg Reed (R-Jasper).
“BCA is thrilled to see these vital pieces of legislation renewed,” Britt commented. “Both the Alabama Jobs Act and the Growing Alabama Tax Credits have proven to be key tools in furthering economic development in both urban and rural parts of our state, building the economy and creating job opportunities for all.”
The Alabama Jobs Act is a program that provides tax incentives to stimulate job creation and capital investment through two separate tax credits – the Jobs Credit and the Investment Credit. Since 2015, the Alabama Jobs Act has provided $2.3 billion in total tax incentives, created 29,279 jobs and provided an estimated return on investment of 176%.
“These economic development incentives that are being renewed and sharpened have proven to be essential tools in our toolbox when it comes to recruiting and expanding industry across Alabama,” added Poole. “And because these incentives are performance-based in terms of requiring the creation of new jobs and attracting new investment, our citizens can be assured that these incentives are a sound investment in Alabama’s economy and the future prosperity of our citizens.”
The Growing Alabama Tax Credit is a tax credit provided to Alabama taxpayers who make contributions to Economic Development Organizations for approved qualifying projects. These local organizations can use the funds to contribute to projects such as inland ports or intermodal facilities, industrial parks and agricultural centers, among others.
“The ability to recruit jobs and businesses to Alabama is critically important to the future of our state as we continue to grow our economy, and this priority legislation gives us the tools to support that mission,” remarked Reed. “Supporting job growth and industrial development is the number one way that we can create a higher quality of life for Alabamians and allow our state to meet its full potential. Our neighboring states, as well as states across our country, are constantly looking for ways to recruit and attract economic investment opportunities. This bill gives Alabama the ability to be competitive in that process.”
A press conference will be held by legislative leaders Thursday regarding HB 192’s passage.
Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn
