Several Key Business Associations Announce 2016 Tax Legislative Agendas

by Bradley Arant Boult Cummings LLP
Contact

In preparation for the 2016 regular session, which begins on February 2, several of Alabama's key trade and business organizations recently announced their tax legislative agendas. As reflected in these agendas, the 2016 session promises to be an active one as these organizations work with legislators to reintroduce tax bills previously considered or introduce new strategies for securing the state's economic growth and prosperity. And in some cases, to work to defeat anti-business legislation such as mandatory unitary combined reporting.

Undoubtedly, General Electric’s decision to leave Connecticut in large part due to that state’s enactment of a mandatory unitary combined reporting bill will be mentioned during any debate on an Alabama “MUCR” bill. It is uncertain, however, whether the Alabama Department of Revenue (ADOR) will again lead the effort to enact such a bill, in light of recent statements by the Governor.

As summarized below, the influential Business Council of Alabama (BCA) and the Birmingham Business Alliance (BBA), the state’s largest chamber of commerce, have adopted extensive state tax legislative agendas. One of the state's leading professional organizations, the Alabama Society of CPAs (ASCPA), also weighed-in, but did not issue a formal agenda. ASCPA President Jeannine Birmingham said, "The ASCPA will align our legislative support with the state tax agenda of the BCA. We do not have any legislative issues this year that are specific to the Uniform Accountancy Act." Ms. Birmingham co-chairs the BCA’s Tax & Fiscal Policy Committee, along with our own Chris Grissom.

Business Council of Alabama Tax Agenda

Building on last year's legislative successes, the BCA will urge passage of proposals that provide additional economic growth and industrial recruitment.

During this year's regular session, the BCA will support:

  1. Streamlining and simplifying the sales/use tax system so that in-state and out-of-state retailers are on a level playing field, and implementing a unified audit process to stop businesses from being audited by the Alabama Department of Revenue and then by cities, counties, and private auditing firms for the same tax and same tax periods.
  2. Legislation to provide for a Research and Development Tax Credit parallel to the federal R&D credit, with an extra incentive if a qualified research institution in the state performs the research.
  3. Coordinating with other stakeholder organizations to develop proposals, including a multistate compact among the Southeastern states, to increase compliance with Alabama’s sales and use tax laws by Internet and other out-of-state vendors.
  4. Legislation to provide for the carry-forward of capital credits on capital projects of less than $100 million of investment and that create fewer than 100 new jobs.
  5. Reforming state-county business license statutes to provide a simpler and more uniform process for businesses to apply and receive an annual business license.
  6. Monitoring efforts to regulate and set minimum standards for individual tax preparers.
  7. Increasing Alabama’s public investment in transportation infrastructure to sustain and promote economic growth, job creation, quality of life, and public safety.
  8. Effective and accountable proposals for economic development incentives for the recruitment and retention of business and industry.
  9. Reauthorization and extension of proven economic development incentives and tax credits, including the Historic Structures Tax Credit, the New Markets Tax Credit, and the Certified Capital Company Tax Credit.
  10. Legislation conforming Alabama tax return due dates to new federal (IRS) tax return due dates.
  11. Researching efforts to simplify Alabama’s income tax code.
  12. Reducing the administrative burden and streamlining the process by which non-profit organizations exempt from paying sales, use and lodging tax receive a certificate of exemption annually from the Alabama Department of Revenue and file information returns.
  13. Clarifying the exemption from the Alabama business privilege tax for any limited liability company that is wholly-owned by a tax-exempt organization.

Conversely, in 2016, the BCA will oppose:

  1. Further efforts to establish mandatory unitary combined reporting or “MUCR” in Alabama.
  2. Any attempts by state taxing authorities to require disclosure, beyond those made in federal income tax returns, for uncertain tax positions or tax shelter items. Specifically, BCA opposes any state-specific disclosures.
  3. State and local efforts to authorize and fund government-owned broadband networks that would directly compete with the private sector outside of the jurisdiction allowed under current law, which would create an un-level playing field.
  4. The unilateral expansion of existing taxes and revenue measures through the regulatory process and/or agency interpretations of existing laws beyond the constitutional and statutory authority of the agency or regulatory body.

Birmingham Business Alliance Tax Agenda

The BBA also endorses several tax legislative proposals at both the state and federal levels. According to Alison Howell, the organization's Vice President of Public Policy, "The Birmingham Business Alliance continues to support responsible and economically feasible tax incentives legislation that will propel our region and state into a competitive position, nationally and globally." As such, the BBA's tax agenda endorses several of the same proposals as the BCA, but also addresses several measures not included in the BCA's agenda. Specifically, the BBA advocates:

  1. An Early Stage Investment Tax Credit that would authorize an investment tax credit that encourages more early-stage company investments. The goal is to launch more companies capable of generating jobs and have a positive impact on the state's economic growth.
  2. State legislation that implements the Remote Transactions Parity Act of 2015, once that bill or a similar bill is enacted by Congress, to allow state and local governments to require the larger online vendors to collect sales tax from their customers in Alabama and remit the tax to the Alabama Department of Revenue (ADOR), as the agent for both the state and the local governments. In turn, those vendors would have an enhanced single point of filing, be subjected to only one audit, and could rely on tax rate information furnished monthly by the ADOR.
  3. The continuation of the Insurance Premium Tax Credit at the current level which offsets insurance premium taxes paid to the Alabama General Fund. The premium tax credits offer incentives to insurance companies operating in the state to invest in Alabama and create jobs.
  4. Modifying the state sales and use tax certificate of exemption legislation enacted last year so as to reduce the administrative burden and streamline the process by which non-profit organizations exempt from sales, use, and lodging tax must now apply annually for a certificate of exemption from the Alabama Department of Revenue and file as-yet unspecified information returns.
  5. Efforts to make permanent the tax credits available under the Alabama New Markets Development Act for certain investments in qualifying low-income communities and the Alabama Historic Structures Tax Credit for renovating certified historic structures. Birmingham area developers claim these two credits have jump-started a number of renovation/restoration projects in downtown Birmingham.
  6. A Research and Development Income Tax Credit parallel to the now permanent federal R&D credit, with an extra incentive if a qualified research institution in the state performs the research.
  7. The proposed federal Business Activity Tax Simplification Act (BATSA) that would provide definite standards to govern when states may impose business activity taxes such as income and business privilege taxes, thus making it easier to determine the economics of interstate transactions.
  8. The federal Short Line Tax Credit Extension, which extends the Short Line Tax Credit that expired on December 31, 2014. This credit assists the smaller freight railroads across Alabama and the United States with upgrades to their lines, enabling them to handle larger, already-existing freight car shipments traveling across the country. The lines of these smaller freight railroads are often the key for prosperity and economic growth for areas they serve.

Conversely, the BBA stated that it will oppose any Congressional effort to repeal the "Last In, First Out" (LIFO) Inventory Method.

Note: Several members of the firm’s SALT Practice Group and Governmental Affairs Practice Group are involved in drafting or advocating the passage of many of the above legislative proposals. Special thanks to our law clerk, Sarah Bothma, for her research and drafting in this annual effort.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bradley Arant Boult Cummings LLP | Attorney Advertising

Written by:

Bradley Arant Boult Cummings LLP
Contact
more
less

Bradley Arant Boult Cummings LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.