Thursday, the Alabama Senate passed legislation that would provide tax relief for the state’s small business and agricultural communities.

The “Small Business Relief and Revitalization Act of 2022,” sponsored by State Sen. Garlan Gudger (R-Cullman), aims to help small businesses battle financial hardships associated with the COVID-19 pandemic.

The bill would ensure that loan forgiveness that farmers and ranchers received under the American Rescue Plan Act (ARPA) is not treated as taxable income by the state. Additionally, the relief would not be considered in determining deductibility of deductible expenses and excluded in determining federal income tax deduction.

Gudger’s bill would also allow a one-month extension of the tax return due dates for Alabama financial institution excise taxpayers and corporate income tax taxpayers.

The legislation would provide additional tax relief for small businesses by increasing the estimated threshold calculation from $2,500 to $5,000. It would allow sales tax licensees the option of a payment of certified funds in lieu of securing a surety bond and exempt up to $40,000 in businesses personal property from state ad valorem taxation.

Gudger in a statement outlined the need for the legislation and touted the efforts of his colleagues to act on behalf of the state’s job creators.

“Small businesses are vital to the viability and sustainability of Alabama’s economy. These businesses are the foundation of our communities and faced extreme obstacles and challenges as a result of the pandemic,” stated Gudger. “Small businesses took a major hit over the last two years, and the pandemic substantially hindered growth and job creation for these enterprises. We have made a great effort in the legislature throughout that time to provide them with the much-needed relief they deserve.”

He added, “This is a huge victory for Alabama taxpayers and small businesses. I appreciate the support of Lt. Gov. Will Ainsworth, Representative Danny Garrett, and my Senate colleagues from both sides of the aisle to tackle this important issue. The momentum is strong to ensure the business environment in Alabama thrives and prospers, with continued possibilities for opportune growth and development.”

Senate President Pro Tem Greg Reed (R-Jasper) applauded Gudger for his work on the upper chamber’s priority legislation.

“Senator Gudger has done a tremendous job spearheading this important bill to provide tax relief to hardworking families and small businesses across Alabama,” advised Reed. “I was happy to co-sponsor this bill and was proud to see my colleagues come together to pass it as a priority piece of legislation.”

“The pandemic has damaged livelihoods in my district and in every community in Alabama, and the Senate is actively working to ensure that the government doesn’t get in the way of relief and recovery for the Alabamians who need it most,” added the Senate leader. “I also thank the Alabama Small Business Commission and Lt. Governor Will Ainsworth for their continued leadership in ensuring our state is doing everything possible to be the best place in the world to do business, work, worship, and raise a family.”

Gudger’s bill and its companion legislation, sponsored by State Rep. Danny Garrett (R-Trussville), each passed the Senate with overwhelming support.

Dylan Smith is a staff writer for Yellowhammer News. You can follow him on Twitter @DylanSmithAL