Bradley attorney Bruce Ely was quoted in Tax Notes on Alabama HB 170, which was signed into law by Gov. Kay Ivey on February 12 to exempt from state tax the economic impact payments, advance refunds, grants, and small business loans forgiven under the PPP, CARES Act, and federal Consolidated Appropriations Act of 2021. The bill will shift Alabama from three-factor apportionment with a double-weighted sales factor to single-sales-factor apportionment and will repeal the state's throwback rule.
Ely said that companies with a heavy in-state presence that export goods to other states and countries will benefit from the switch to single-sales-factor apportionment.
The throwback rule won't cause those sales to be thrown back if the taxpayer-seller isn't subject to a net income tax in the destination state, Ely explained. "Conversely, those companies selling into Alabama will not be able to dilute their Alabama apportionment factor with payroll and property."
The original article, "Alabama Governor Signs Business Tax Breaks, COVID-19 Relief," appeared in Tax Notes on February 16, 2021.