Alabama Taxpayers’ Bill of Rights II – Approved on Final Legislative Day

State & Local Tax Alert: Alabama Edition


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SB 549 Creates Independent Alabama Tax Appeals Commission

On May 16, the last day of the 2012 Regular Session, the Alabama Legislature passed the Conference Committee Substitute to Senate Bill 549, the Alabama Tax Appeals Commission Act / Alabama Taxpayers’ Bill of Rights Act II. Sen. Ben Brooks was the lead Senate sponsor and Rep. Paul DeMarco was the lead House sponsor. The Senate unanimously approved the substitute to SB 549, 33-0, and the House approval followed shortly thereafter, 95-1. The bill must be signed by Governor Bentley by May 26 in order to become law.

This landmark legislation creates the independent Alabama Tax Appeals Commission (ATAC), which is accomplished by abolishing the current Administrative Law Division of the ADOR and transferring both the personnel and equipment to a newly-formed state agency, under the executive branch. One key feature of ATAC is the ability for taxpayers to appeal assessments of sales, use, rental, or lodging tax from self-administered cities and counties and their contract auditing firms to the ATAC, unless the governing body of the city or county opts out. The annual appropriation for the Administrative Law Division is simply assigned to ATAC, so there is no additional cost. Alabama is now in the distinct minority of states that lack an independent tax appeals tribunal – both Georgia and Mississippi have recently created independent tax courts.

The bill also includes several changes to Alabama’s existing procedural provisions, such as extending the appeal periods for preliminary and final assessments from 30 to 60 days for most taxpayers and allowing taxpayers with disputed NOL adjustments the option to appeal to ATAC. Further, at the request of the Department of Revenue, the bill also amends the so-called RAR reporting requirements and modernizing certain penalties consistent with their federal counterparts.

Several prominent trade and business associations supported SB 549, including the 28-member Business Associations’ Tax Coalition (BATC); the Business Council of Alabama; the Alabama State Bar; the Alabama Society of CPAs; the Alabama Retail Association; Manufacture Alabama; the Alabama Bankers Association; Alabama Farmers Federation; the Birmingham Business Alliance; the West Alabama, Montgomery, and Mobile Area Chambers of Commerce; the American Bar Association; the Council On State Taxation (COST); and the Tax Executives Institute.