Friday, April 24, 2015
What did surface this week were bills to unearmark taxes, end the current income tax structure in favor of a flat tax and discontinue the retailers’ sales tax discount allowance among other tax discounts.
Sen. Bill Hightower, R-Mobile, this week introduced SB409, a constitutional amendment to cut the income tax rate from five percent to 2.75 percent, cut the corporate tax rate from 6.5 percent to 4.59 percent, eliminate deductions, exemptions and credits and “simplify” the tax filing process. If approved by Alabama voters, the changes would be effective Jan. 1, 2017. Hightower’s bill has 19 co-sponsors, representing the majority of the Alabama Senate. The Business Associations’ Tax Coalition, for which Alabama Retail Association President Rick Brown serves as chairman, is expected to complete an analysis of and discuss the bill early next week. The Senate Finance and Taxation Education Committee will consider Hightower’s bill Wednesday.
SALES TAX DISCOUNT LOSS
HB553 by Rep. Ken Johnson, R-Moulton, introduced legislation to discontinue administrative discounts for filing a variety of taxes early, including the discount given to retailers for remitting sales and use taxes early.
Under state law, a discount is allowed if the sales tax is paid before the 20th day of the month in which the tax is due. The sales tax discount is 5 percent on the first $100 of tax due, and 2 percent of all tax over $100, but monthly discounts can’t exceed $400 based on a 2001 executive order issued by then Gov. Don Siegelman. Prior to the executive order the maximum discount was $900. Only those retailers remitting or paying $19,850 or more in sales taxes before the deadline of the 20th of each month can claim the maximum $400 discount, and the cap is $400 no matter how many locations a retailer operates in Alabama.
Johnson’s bill also does away with discounts for gasoline, diesel fuel and motor carrier fuel taxes, contractors’ gross receipts, tobacco stamps and lodging taxes. The discounts would cease to exist Oct. 1 if the bill passes. It has been assigned to the House Ways and Means Education Committee.
Bill Limiting Retailers’ Ability to Extend Credit
to Get Further Study This Summer
The Senate Banking and Insurance Committee conducted a public hearing Wednesday on SB29 by Sen. Linda Coleman, D-Birmingham, but took no action on the legislation that would limit retailers’ ability to extend credit to the customers who need it the most.
The committee’s chairman, Sen. Slade Blackwell, R-Birmingham, appointed a study committee to review the legislation over the summer. He encouraged all interested parties to work together. The 51-page bill would significantly reform debt collection in our state and subject those who try to collect debt to lawsuits. Several major business organizations objected to the bill as written, including the Alabama Retail Association.
The House Judiciary Committee on Wednesday amended and approved HB396 by Rep. Jim Hill, R-Moody, which would increase Alabama’s homestead exemption from $5,000 to $30,000 and the personal property exemption from $3,000 to $10,000 for surviving spouses and an individual debtor. The Senate Finance and Taxation General Fund Committee already has approved the companion, SB327 by Sen. Cam Ward, R-Alabaster, but the Senate bill does not include the House committee amendment. The House and Senate bills are now ready for consideration by the respective bodies.
The amendment removed references to additional exemptions allowed under the federal bankruptcy law.
Senate Votes to Oppose
Medicaid Expansion; Stalling Ensues
Senators voted 22-8 Tuesday for SJR 34, expressing the Alabama Legislature’s opposition to Medicaid expansion and that lawmakers have no intention of allocating funds for it. The federal Affordable Care Act encourages states to expand Medicaid to 138 percent of the federal poverty level. The federal government will pay all of the cost of expanding coverage through 2016; after that, the match goes down by 2 percent each year until Alabama is paying 10 percent of the expansion cost. Gov. Robert Bentley has said he could support expanding eligibility through a block grant and if the state could require recipients to work. The Centers for Medicare and Medicaid Services this month threatened to withdraw money hospitals get to cover the uninsured in states that have decided not to expand Medicaid.
The Senate’s Democrats voted against the resolution and then proceeded to begin filibustering all legislation that followed the resolutions’ passage.
Lodging Tax Filings
Part of ONE SPOT Starting Oct. 1, 2016
County and municipal lodgings tax can be filed and remitted with sales, use and rental taxes through the state’s ONE SPOT online filing system beginning Oct. 1, 2016, under Act. No. 2015 – 52 by Sen. Paul Sanford, R-Huntsville.
Sen. Quinton T. Ross, D-Montgomery, this week introduced SB393, which creates an income tax credit for employers who employ those released from incarceration. It would apply to released prisoners who are either on probation, parole or have reached the end of his or her sentence and have received a certificate or associate degree through a correctional education program associated with the Alabama Community College System. Employers could earn a $1,000 tax credit for employing an ex-prisoner for at least seven months of the taxable year. The credit would be good for up to four taxable years as long as the individual remained employed with the business. If passed, the income tax credit would be effective for the 2016 tax year. The bill has been assigned to the Senate Finance and Taxation Education Committee.
House Votes to Limit Frequency and
Require Notice of Police Jurisdiction Changes
On a vote of 67-20 Thursday, the Alabama House passed a substituted and amended version of HB377 by Rep. Ron Johnson, R-Sylacauga. The bill among other provisions would allow a municipality to change its police jurisdiction only once a year and require that municipalities notify residents and businesses of the jurisdiction change 30 days BEFORE enforcing certain ordinances, collecting license fees and levying and collecting taxes within the new jurisdiction. The notice also must be posted on the state-operated Atlas Alabama site and in a newspaper of general circulation in the affected area.
The amendment would allow a municipality to opt out of having a police jurisdiction altogether in a noncontiguous property annexation.
Substitute State Store Privatization Bill
Gains Senate Budget Committee Support
The Senate Finance and Taxation General Fund Committee on Wednesday voted 12-2 for a substitute version of SB115 by Sen. Arthur Orr, R-Decatur, which would phase out retail alcohol sales at the Alabama Alcoholic Beverage Control Board’s 176 state stores by Oct. 1, 2016. On April 8, the same committee voted 7-6 against Orr’s original bill. Orr sponsored similar legislation in the past, which failed to garner enough support.
In addition to the state’s 176 retail alcohol stores, the state licenses 587 private package stores, which buy their products from the ABC Board, ABC Board Administrator Mac Gipson testified earlier this month. Under Orr’s bill, the private liquor stores currently licensed by the state can maintain and renew those licenses, but those licenses cannot be sold or transferred. The legislation sets up the process for future retail liquor licenses. Private retail liquor stores that hire the displaced state workers receive a 20 percent discount for up to five years on license and permit fees collected by the board for each complete year the displaced employee is employed full-time. The bill now goes to the full Senate for consideration.
The Scottsboro City Council acted quickly on a new state law that allows seven-day alcohol sales in the city. The city’s new alcohol ordinance, which passed April 13, allows alcohol to be sold 24 hours a day, seven days a week in that city. The governor had already signed into law permissive legislation by Sen. Steve Livingston, R-Scottsboro, and in the past week signed the companion, Act. No. 2015 – 55 by Rep. Tommy Hanes, R-Bryant.
Also signed in the past week was Act. No. 2015 – 56 by Rep. Nathaniel Ledbetter, R-Rainsville, which allows the Fort Payne City Council to authorize the sale of draft or keg beer or malt beverages in the city limits.
The House Local Legislation Committee on Wednesday approved HB479 by Rep. Isaac Whorton, R-Valley, which would allow the Valley City Council to ask voters to approve Sunday alcohol sales after noon. Valley is in Chambers County. If the council approved it, the referendum would be held at the next regular or special election.
Thursday, the same committee approved HB489 by Rep. Richard J. Lindsey, D-Centre, which would allow the Collinsville Town Council in DeKalb County to authorize the sale of draft or keg beer or malt beverages.
Both bills now are ready for consideration by the full House.
The Senate Tourism and Marketing Committee next week will consider SB247 by Sen. Billy Beasley, D-Clayton, which allows licensed liquor manufacturers or representatives to conduct liquor and wine tastings, at no charge to consumers, in retail and state liquor stores. Under this legislation, one-quarter ounce of liquor with no more than two products or one ounce of wine with no more than four products could be served at any tasting. The House companion, HB294 by Rep. Margie Wilcox, R-Mobile, has been assigned to the House Economic Development and Tourism Committee.
Companion legislation has been introduced to allow manufacturer as well brewpub licensees in Madison County to sell beer produced at their facility to customers for on-premises and off-premises consumption. HB514 by Rep. Jim Patterson, R-Meridianville, and SB416 by Sen. Paul Sanford, R-Huntsville, also would allow those licensees to operate a restaurant and participate in an entertainment district. The bill mirrors a statewide bill, SB214 by Sen. Larry Stutts, R-Tuscumbia, which had been slated for committee consideration this week. The Senate Tourism and Marketing Committee, like the House Economic Development and Tourism Committee, has decided to commit to further study bills that bypass the state’s three-tier alcohol sales system of producers, distributors and retailers. Products can only be sold to distributors who sell to retailers under that system.
The local bills have been assigned to the Madison County Legislation Committee in their respective chambers.
Bills Would Alter Practice of Pharmacy
Two bills that would alter some aspect of the practice of pharmacy have been introduced. Both have been assigned to the House Health Committee.
HB491 by Rep. Arnold Mooney, R-Birmingham, would give healthcare providers, including pharmacists, the right to refuse some reproductive healthcare services that violate their conscience. The bill has 54 cosponsors. In 2014, similar legislation received committee approval but never received a floor vote. The issue also has failed to make it through the legislative process prior to 2014.
HB494 by Rep. Ron Johnson, R-Sylacauga, would authorize the State Board of Pharmacy and the State Board of Medical Examiners to regulate and adopt rules for collaborative drug therapy management, a team approach to healthcare delivery in which a pharmacist and prescribing physician establish written guidelines or protocols authorizing the pharmacist to initiate, modify or continue drug therapy for a specific patient.
Companion Bills Would Ban Local Government
Interference with Hiring and Labor Relations
- interfere with an employers’ ability to conduct background checks and any other lawful investigations relating to an employee or potential employee that comply with state law.
- require any employer or employee to waive their rights under the National Labor Relations Act.
- interfere with the state’s authority to regulate collective bargaining under federal labor laws.
The House bill has been assigned to the House State Government Committee, while the Senate bill has been assigned to the Senate Fiscal Responsibility and Economic Development Committee.
Albritton also introduced another similar bill, SB408.
The House Commerce and Small Business Committee next week will consider:
- SB322 by Sen. Paul Sanford, R-Huntsville, which relieves business taxpayers using the state’s ONE SPOT electronic tax filing system from liability for charging and collecting the incorrect tax rate if they are provided incorrect informaiton from a governmental entity, and
- HB506 by Rep. Napoleon Bracy, D-Prichard, which would reduce unemployment benefits for those receiving a pension or retirement benefits only if those benefits were 100 percent employer financed.
The House Military and Veterans Affairs Committee next week will consider SB269, the Voluntary Veterans’ Preference Employment Policy Act, by Sen. Bill Holtzclaw, R-Madison, which would allow private employers to have a written, voluntary veterans’ preference employment policy. The policy would have to be applied uniformly to employment decisions, such as hiring, promotion or retention. The Alabama Senate has already passed the bill.
Wednesday morning, the House Public Safety and Homeland Security Committee will consider HB47 by Rep. Chris England, D-Tuscaloosa, which makes it a Class C misdemeanor to carry a pistol on your person or on private property without consent of the property owner.
NEXT LEGISLATIVE DAY
The Alabama Senate will convene at 10 a.m. Tuesday, April 28, for the 17th legislative day of the Alabama Legislature’s 2015 regular session. The Alabama House will convene at 1 p.m.
Cybersecurity Bills Moving Through Congress
The Protecting Cyber Networks Act (HR1560), a bill that would push companies to share access to their computer networks and records with federal investigators, passed the U.S. House on Wednesday on a vote of 307 to 116.
Thursday, on a vote of 355 to 63, the House passed the National Cybersecurity Protection Advancement Act (HR1731), which would extend liability protections to companies only when giving data to the Department of Homeland Security.
Senators had hoped to bring a companion bill, known as the Cybersecurity Information Sharing Act (S754), to the floor sometime in April, but it appears amendments and other issues will keep that from happening.
A state data breach notification bill, SB106, is pending in the Alabama Senate.