Governor Kay Ivey on Friday signed House Bill 77. During Governor Ivey’s 2023 State of the State Address, she called on the Legislature to help create greater economic stability for Alabama businesses operating in a challenging national economy. Ivey proposed that lawmakers reduce the financial load shouldered by small businesses by passing legislation lowering their prepaid sales tax burden. House Bill 77 increases the threshold for small businesses to submit their estimated monthly sales tax payments from $5,000 to $20,000 in average monthly sales tax liability.
“Our economic stability begins and ends with the success of our small businesses, and it’s imperative that leaders at all levels of government actively look for ways to cut red tape and help them thrive,” said Gov. Ivey. “Eliminating the requirement for our small businesses with less than $500,000 in monthly sales to prepay taxes is a no-brainer. It not only frees up capital but also allows owners to focus solely on turning a profit every month and staying in business. This is an example of good government, and I commend the men and women of the Legislature for passing this bipartisan legislation for the people of our state.”
The Alabama Department of Revenue estimates this legislation will positively impact over 3,000 small businesses in Alabama.
House Bill 77 was sponsored by State Representative Danny Garrett (R-Trussville).
Governor Ivey also signed House Bill 293 related to port credits. The governor released a statement saying that the port credit will encourage businesses in the state to increase shipping through the Alabama port.
“As Alabama’s economy continues to grow, our public ports are valuable assets for businesses seeking to ship their in-demand products through the state,” said Gov. Ivey. “This legislation, which increases port-use tax credits, will encourage businesses engaged in manufacturing, warehousing, or distribution in the state to increase the volume of the cargo they ship through Alabama’s public ports. A compliment to Alabama’s successful ‘Game Plan’ economic incentives package which I signed into law in April, this legislation will also attract more jobs and investment to our state.”
HB293 was sponsored by State Rep. Chip Brown (R-Hollinger’s Island).
HB293 expands the cap of the port credit and expands tax incentives for businesses and enterprises that increase their cargo volume through Alabama public ports. Upon review of the applications, the commission may approve such applications as shall result in port credits being awarded so as not to exceed $20,000,000)for the life of the program, and shall not exceed $5,000,000) in a fiscal year.
The commission shall charge application fees to offset the costs of administration of this article.
Before claiming a port credit, the company shall submit to the Department of Commerce a certification containing information adequate to prove that the company is entitled to the credit.
If approved by the commission, a port credit is allowed, in an amount equal to $50 per TEU, three dollars, $3 per net ton, $0.04 per kilogram for air freight, or $2.91 per VEU.
The port credit may offset the tax levied by this chapter, but not below zero. The port credit may also offset the estimated payments of the tax levied by this chapter, but not below zero. In no event shall the port credits be allowed to reduce any estimated payment of the tax levied by this chapter before October 1, 2016.
The 2023 Alabama Regular Legislative Session ended on Tuesday.
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