Bradley attorney Bruce Ely was quoted in Bloomberg Law on Alabama legislation that limits the individual tax credit available for income taxes paid to other states. H.B. 384, which was signed into law by Gov. Kay Ivey on March 28, sets a percentage limit on the credit resident taxpayers can claim, in addition to the limits already existing in state law.
The new law limits the credit to the percentage of non-Alabama income relative to total Alabama income. The revenue department sought in recent years to impose the same limit through a department regulation, but the Alabama Tax Tribunal found the rule to be an overreach of statutory authority in a September 2016 decision responding to a taxpayer appeal.
H.B. 384 is a “fair compromise” in resolving the dispute between taxpayers and the revenue department, explained Ely, a member of Bloomberg Tax's State Tax Advisory Board.
“We're glad to see this long-running saga finally come to an end,” Ely said. The main goal of taxpayers and practitioners was to ensure the restriction applies going forward, not retroactively, he said.
The complete article, “Alabama Enacts Limit on Credit for Other States’ Taxes,” appeared in Bloomberg Law on March 30, 2018.