Following the adjournment of Alabama’s 2017 regular legislative session, Gov. Kay Ivey signed several NFIB-supported bills into law. Here’s a look at them.
SB 257: Irrigation Tax Credit Increase
This tax credit applies to one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer. In 2012, the original law that was passed limited the irrigation tax credit to 20 percent of total cost, not to exceed $10,000 in tax liability. SB 257 will allow farmers to claim the greater of either the current provision or 10 percent of accrued cost, not exceeding $50,000 in credit.
SB 316: Business Delivery License Reform
Changes to the municipal business delivery license law have long been sought by Alabama’s small businesses, and SB 316 delivers. Under the bill, businesses will be exempt from purchasing a delivery license if their deliveries do not exceed $10,000 annually and they do not have a physical presence in the municipality or police jurisdiction. SB 316 also deletes provisions for fee increases, sets the business delivery license fee amount at $100, and caps the issuance fee at $10.
HB 242: Paperwork Reduction for Business and Government
Currently, state law allows business owners and officers to be exempt from coverage under worker’s compensation by filing a written certification with the Department of Labor (DOL) and the employer’s insurance carrier. HB 242 removes the filing requirement with DOL and will reduce filings by insurance carriers and individual parties, thereby reducing the paperwork burden for both businesses and the DOL. If a dispute arises between the insurance carrier and business owner/corporate officer, the deciding factor will be whether premiums are paid, not the certification filing.
HB 313: Severance Tax
Without promulgating new rules, the Alabama Department of Revenue (DOR) had previously expanded the definition used to calculate and collect forest product severance taxes and forest product manufacturing taxes, essentially “taxing the same tree twice.” HB 313 amends and simplifies the tax language to ensure the taxes are only paid once.
HB 290: Labor and Services Tax
HB 290 will stop the Alabama DOR from continuing to perform audits for the collection of a labor and services tax on commercial photography businesses, which was implemented in 2014 by the DOR. The measure restates and clarifies existing state law following State Department of Revenue v. Omni Studio, LLC Omni Studio lawsuit, in which Omni prevailed at every jurisdiction.
HB 390: Franchise Business Protection Act
With HB 390, Alabama became the 11th state to pass legislation protecting the franchise business model after the National Labor Relations Board (NLRB) expanded the definition of a joint employer. Under NLRB’s new rules, employees of an individual franchise are considered under control of the larger corporate franchisor. However, HB 390 clarifies that the franchisee is the owner of the business and ultimate employer of the individuals who work there, and it also stops state enforcement agencies and local governments from applying the NLRB’s expanded joint-employer standard.
