Connect with us

Hi, what are you looking for?

Legislature

Tax cut bill passes unanimously in Senate

The tax would decrease individual income tax receipts to the state Education Trust Fund by an estimated $12,923,000.

(STOCK)

The Alabama Senate unanimously approved Tuesday a potential tax cut for working Alabama families and certain retirees.

Senate Bill 19, sponsored by state Sen. Arthur Orr, R-Decatur, would target families within the $50,000 to $55,000 range that use the standard deduction, according to Orr. The bill also raises the maximum dependent exemption from $20,000 to $50,000.

Under current law, the state levies an income tax upon all residents and nonresidents who receive income from Alabama sources. Taxpayers are allowed an optional standard deduction, as well as dependent exemptions in computing income subject to the tax.

This bill would increase the optional standard deduction for married filing jointly taxpayers by $1,000 and for taxpayers who file married filing separate, single, and head of family by $500. It would also increase the adjusted gross income range allowable for the maximum optional standard deduction to $35,000 (from $33,000) and the adjusted gross income range allowable for dependent exemption to $50,000 (from $20,000) to increase the threshold at which the state imposes individual income taxes.

In a statement Tuesday, Orr said the state budgets are “in a very good place” due to federal COVID-19 relief funds and the legislature’s budgeting approach over the last decade.

“Inflation is at a nearly 40-year high, and the rising prices make it difficult for several struggling families to afford groceries, gas, and necessities,” Orr said. “While individuals are spending more money on these everyday items, the state is directly benefitting from it. It’s critical that lawmakers make a significant effort to support Alabamians when we have the means to do so.”

The bill now moves to the House for consideration.

Advertisement. Scroll to continue reading.

According to U.S Census data, between 2015 and 2019, the median household income in Alabama was $50,536, with the per capita income at $27,928.

John is a reporter at the Alabama Political Reporter. You can contact him at [email protected] or via Twitter.

More from APR

Featured Opinion

Opposition to DEI within GOP ranks is complex and part of a broader move toward more authoritarian governance.

Legislature

Sen. Kirk Harcher, D-Montgomery, said the bill would “decapitate public education.”

Legislature

The Legislature will return to begin its 13th legislative day, out of 30, on Tuesday, March 5.

Legislature

The program is intended to provide funding for students who wish to pursue alternatives to public education.