Governor Kay Ivey on Wednesday signed House Bill 391, sponsored by Rep. Steve Clouse, R – HD93, and Sen. Tom Butler, R – SD2, into law, providing relief from the business privilege tax for Alabama small businesses. The exemption will provide relief to more than 230,000 small businesses across Alabama and further demonstrates Governor Ivey is delivering real results to Alabamians and making this state the best place to do business.
“Alabama’s small businesses are the soul of our economy, and as long as I am your governor, I will continue to be a champion for these hardworking men and women. We are providing real relief to our small businesses,” said Governor Ivey. “I commend Chairman Clouse and Senator Butler for their leadership and the Alabama Legislature for their work to support our small businesses. This will go a long way in providing support for some 230,000 small businesses for years to come.”
When fully implemented, the exemption is projected to save the state’s small businesses an estimated $23 million a year. Beginning in tax year 2023, this new law cuts the $100 minimum business privilege tax in half to $50 for small businesses, and it completely exempts small businesses from the minimum tax beginning in 2024.
Currently, the Alabama Business Privilege Tax levies a minimum of $100 annually on corporations, limited liability entities and other businesses in Alabama. The tax remains due every registered year until the entity is legally dissolved, regardless of whether or not such entity is actively doing business in Alabama. Governor Ivey’s signature on House Bill 391 is certain to deliver relief to Alabama’s many small businesses.