05/02/2008
State
$82 million business tax increase goes to Senate
The House voted 75-29 on Wednesday to approve a precedent-setting retroactive tax increase of $82 million. Thanks to everyone who belongs to the Business Association Tax Coalition (NFIB/Alabama is a founding member) who called their representatives in an effort to stop this massive tax increase. Your efforts also encouraged pro-business legislators who were able to hold off the vote for four legislative days. Unfortunately, we must continue to fight to stop this legislation. House Bill 350 by Rep. Richard Lindsey (Centre) now heads to the Senate Finance and Taxation-Education Committee, where key senators seem primed to balance the Alabama education budget on the back of business.
NFIB-backed health insurance premium bill passes House
On a 92-6 vote, the House approved a significantly watered-down version of HB 144 by Rep. Jay Love (Montgomery), which as originally proposed would have provided much-needed small business and employee tax credits for health insurance coverage. The House linked HB 144 and HB 350 so that if one fails, both will.
Under the amended version of HB 144, businesses with 25 or fewer employees and employers who earn $50,000 or less annually would be able to deduct 20 percent more than they do now for health insurance payments, beginning in 2009. If the education fund grows 6 percent in any two years between 2010 and 2014, that deduction would grow to 35 percent and then 50 percent above the current deduction. It is highly unlikely the education fund will grow 6 percent twice in the next six years. Although the fund did see double-digit percentage growth in recent boom years, the average annual growth prior to that boom was 5.5 percent. Currently, businesses can deduct 100 percent of what they pay for employees' health insurance from their state income taxes, while individual taxpayers can deduct the amount they pay toward their health insurance from their individual income taxes. The original version of the bill, which was endorsed by NFIB, would have doubled the deduction for employers and employees.
While our fight against a tax increase in the midst of an economic downturn continues, special thanks goes to the representatives who voted against HB 350 and valiantly offered amendments or motions on business' behalf, either to make the legislation workable or to prolong the debate. These pro-business legislators were able to tie up the Alabama House of Representatives for four legislative days in an effort to stop this bill. The 29 representatives who voted with business and against this bill are Reps. Mike Ball (Huntsville), Jim Barton (Mobile), DuWayne Bridges (Valley), Greg Canfield (Birmingham), Spencer Collier (Irvington), Randy Davis (Daphne), Paul DeMarco (Homewood), Owen Drake (Leeds), Joe Faust (Fairhope), Mac Gipson (Prattville), Chad Fincher (Semmes), Victor Gaston (Mobile), David Grimes (Montgomery), Micky Hammon (Decatur), Mike Hill (Columbiana), Mike Hubbard (Auburn), Jamie Ison (Mobile), Benjamin Lewis (Dothan), Jay Love (Montgomery), Barry Mask (Wetumpka), Mary Sue McClurkin (Indian Springs), Steve McMillan (Bay Minette), Joseph Mitchell (Mobile), Arthur Payne (Trussville), Howard Sanderford (Huntsville), Cam Ward (Alabaster), Randy Wood (Anniston), Jack Williams (Birmingham) and Greg Wren (Montgomery).
Please call your senator at 334-242-7800 and urge them to oppose HB 350 in its current form.
Senate version of the repeal of federal tax bill fails but House version still alive
The Senate version of the bill that would eliminate the state 4 percent sales tax on food failed on the Budget Isolation Resolution procedural vote of 16 yeas to 11 nays. Four senators abstained, and four did not vote. Because this was a constitutional amendment, it required 21 "yes" votes to pass. The House version of the bill is on the Senate calendar with three days remaining on the Legislature's calendar. HB 274 as passed by the House would increase income tax revenue to the education budget by an estimated $345 million annually. The sales tax exemption does not eliminate the city and county sales taxes on food, which combined are often more than 4 percent. The legislation does not prevent cities and counties from raising their rates, nor is there a cap on the rates that cities and counties can charge. The exemption only covers food that can be purchased with food stamps, and this definition means food as defined in the Federal Food Stamp Act, 7 U.S.C. S 2011, et. seq.
Please call the following senators at 334-242-7800 and thank them for standing up for taxpayers. Sens. Scott Beason (Birmingham), Charles Bishop (Jasper), Ben Brooks (Mobile), Hank Erwin (Montevallo), Steve French (Birmingham), Rusty Glover (Mobile), Jimmy Holley (Elba), Del Marsh (Anniston), Tripp Pittman (Daphne), Harri Anne Smith (Slocomb) and Jabo Waggoner (Birmingham).
If your senator is not listed above, please call 334-242-7800 and urge them to vote no on HB 274. Please contact them no later than Tuesday morning, May 6.
Punitive immigration legislation still pending
The House may still consider HB 664 by Rep. Randy Hinshaw (Huntsville) during the remaining three legislative days. This legislation threatens business owners by mandating that the Alabama Department of Revenue revoke the business licenses of companies found to have knowingly hired illegal immigrants. This legislation:
- Requires that the Department of Revenue to become the immigration police, even though the department is not trained in federal immigration or employment law.
- Calls for Revenue to hire an additional 1,000 employees
- Allows the department to conduct an investigation anytime it has a "reason to believe" that a violation has occurred but fails to require that the belief must be "reasonable"
- Fails to define the type of investigation Revenue must conduct
- Requires an employer to provide "all employment records" to Revenue
- Fails to provide safe harbor exempting a contractor for responsibility of its subcontractor's hiring practices
- Is preempted by federal law
- Could created a new cause of action for employers
Federal
Second congressional district forum held in Dothan
Candidates from both parties participated in a candidate forum on Tuesday on Troy University's Dothan campus. The last of three forums sponsored by NFIB, AARP, Troy University and WSFA, Channel 12, in Montgomery featured a two-hour forum with questions from a three person panel including NFIB/Alabama State Director Rosemary Elebash. NFIB members Patricia DeVane, Cosas LLC in Dothan, and Riley Seinbenhener, a real estate appraiser from Ozark, attended the forum.
Sen. John McCain to address NFIB Summit
Sen. John McCain, the presumptive Republican Party nominee for president, will be a keynote speaker at the NFIB 2008 National Small-Business Summit.
The Summit will be held Monday, June 9 and Tuesday, June 10 at the Grand Hyatt Washington in Washington, D.C. Sen. McCain is scheduled to address the meeting on Tuesday morning. Sens. Hillary Clinton and Barack Obama also have been invited to speak to the hundreds of small business owners from around the country who are expected to attend.
The deadline for attendees to receive a discounted hotel rate is May 9. More information about the Summit, including online registration, is available at http://www.NFIB.com/Summit.
If you have any questions, please contact the Montgomery office at 334-264-2261.
Sincerely,
Rosemary Elebash
NFIB/Alabama State Director
Rosemary.Elebash@NFIB.org
