Bradley attorney Bruce Ely was quoted in Law360 on Alabama HB 170, which exempts federal aid for the coronavirus pandemic from state income taxes, and HB 192, which reinstates an expired tax credit for cash contributions to local economic development organizations. Alabama is one of a handful of states that haven't fully decoupled from GILTI and does not offer a full dividends-received deduction. Under HB 170, qualified consolidated groups are excluded from the business interest deduction limit under Section 163(j) of the Internal Revenue Code and replace the current income apportionment formula with a single sales factor.
Ely said that federal COVID-19 aid relief, decoupling retroactively from GILTI and enacting a SALT cap workaround would support multistate businesses.
"Obviously, there will be winners and losers here," Ely said about the transition to a single sales factor and the repeal of the state's throwback rule.
The original article, "Ala. Senate Passes Fed. Virus Aid Tax Break, Credit Renewal," appeared in Law360 on February 11, 2021.