BCA-Backed Tax Law Update Results in Grade Upgrade for State

The Council on State Taxation said Alabama’s tax administration score jumped from a “D” to a “B” in 2014 due to the Legislature’s passage of a single bill that was successfully backed by the Business Council of Alabama.

In COSTS’s “Best and Worst of State Tax Administration” for 2014, the Taxpayer Fairness Act was cited as the reason for the dramatic improvement in Alabama’s score.

Governor Robert Bentley in March signed the Taxpayer’s Bill of Rights II into law as The Alabama Taxpayer Fairness Act. TBOR II updates the original Taxpayer’s Bill of Rights first passed in 1992.

For years modernizing the law was a significant goal of the BCA for its members. COST said the BCA was instrumental in the bill becoming law. The new law abolished the Department of Revenue’s Administrative Law Division and replaced it with an independent agency called the Alabama Tax Tribunal.

In 2013, COST gave Alabama a ‘D’ because ‘Alabama lamentably failed to establish [an independent tax appeals tribunal] again this year’.

COST said Alabama can improve its “B” score to an “A” by lengthening the amount of time allowed for businesses to file to 30 days after the federal filing date, and by making the appeals process more transparent.

The Council On State Taxation (COST) tax organization representing taxpayers is a nonprofit trade association of more than 600 multistate corporations engaged in interstate and international business. COST’s objective is to preserve and promote equitable and nondiscriminatory state and local taxation of multijurisdictional business entities, according to its web site.

-Dana Beyerle