Gov. Kay Ivey has signed a bill that will aid the state’s small businesses.
The governor signed House Bill 82 on Monday, which will provide instant tax relief for small businesses operating in the state. According to the fiscal note attached to the bill, tax exemptions of up to $40,000 in valid business personal property will be exempt from the state’s ad valorem tax. The move eliminates 75% of small businesses in the state from paying the state portion of the tax.
“Small businesses are the pillars of our communities and Alabama’s economy,” Ivey said in the release. “The Small Business Relief and Revitalization Act will provide much needed and deserved tax relief for these folks. I look forward to continually supporting Alabama’s many small businesses.”
The exemption kicks in Oct. 1, 2023, and will reduce annual ad valorem tax receipts to the Public School Fund by $2.02 million, $1.68 million to the General Fund, and $670,000 from the Veterans Assistance Fund.
The Small Business Relief and Revitalization Act, according to the release, was sponsored by Rep. Danny Garrett, R-Trussville.
The legislation, according to the release, will also feature corporate and income tax relief provisions. Also included are sales and business property tax relief that will impact small businesses across the state.
According to the release, the legislation will also benefit disadvantaged farmers for specific tax relief. The bill will ensure loan forgiveness under the American Rescue Plan will not be treated as income under state law. It will also be excluded from calculations that will determine a taxpayer’s federal income tax deduction.
In addition, according to the release, a one-month filing extension will be granted from the due date for tax returns by Alabama’s financial institutions for excise tax and corporate income tax.
Under the bill, relief in the form of reducing the estimate sales tax payments on more than 2,400 small business in the state by raising the threshold to $5,000, an increase of $2,500, by allowing sale tax licensees the option of using certain certified funds instead of using surety bonds.
This article was originally posted on Ivey signs bill that will provide tax relief to small businesses