Bradley attorney Bruce Ely was quoted in the Birmingham Business Journal on a new law that exempts Alabama taxpayers from being taxed on a variety of benefits provided through the CARES Act and implements other business tax reform measures, and could potentially help draw more businesses to the state.
“This is one of the most important pieces of tax legislation that’s been enacted by our legislature in the past 20 years or more,” said Ely. “The new act affects millions of Alabamians and thousands of Alabama businesses – both those headquartered here and those selling to customers in our state.”
The act changed Alabama’s apportionment factor for most corporate income taxpayers from a three-factor formula with the sales factor double-weighted to a single sales factor formula. It also repealed the so-called throwback rule not only for sales from in-state facilities to private-sector customers located outside of Alabama but also for all sales to the U.S. government.
“From a multi-state business perspective, the state of Alabama will become much more competitive with its Southeastern neighbors by switching to a single-sales apportionment factor and repealing the so-called “throwback rule,” and by decoupling from the crazy federal rule imposing tax on foreign income called GILTI,” Ely said. “My recommendation to the TCJA Task Force to decouple from the business interest limitation rule of IRC section 163(j) was not adopted, but the drafters at least reduced the impact of the limitation when the companies are members of a federal consolidated group.”
The original article, "New Alabama Law Could Help Draw More Businesses to the State," appeared in the Birmingham Business Journal on February 22, 2021.