House passes limit to cities’ ability to levy occupational taxes

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Alabama Statehouse

MONTGOMERY, Ala, (AP) — Alabama cities would be prohibited from enacting new occupational taxes without legislative permission, under a proposal approved Tuesday by the House of Representatives.

Lawmakers voted 74-27 for the bill that now moves to the Alabama Senate. The measure comes as the city of Montgomery explores the possibility of creating a 1% occupational tax.

The bill by Republican Rep. Chris Sells of Greenville would prohibit cities from enacting occupational taxes through their city councils. Local occupational taxes could still be enacted but would require the approval of a local bill in the Alabama Legislature.

The bill would not impact any existing occupational taxes.

Occupational taxes are taxes paid by people who work within the city limits.

Sells said many people work in a city, but live outside city limits. He said they have no representation on a city council debating an occupational tax.

“My goal is to give a voice to the people,” Sells said.

Opposed lawmakers said the proposal takes away from the autonomy of cities.

“It bothers me for us to play Big Brother in a sense to say, ‘OK, this is what you can and you cannot do,’” Rep. Napoleon Bracy, D-Prichard, said.