Federal Tax Reform Impact: What you should know

Business Council of Alabama members have released information about the Alabama Department of Revenue’s interpretation of how the 2017 federal tax law revisions will affect Alabama.

Bradley law firm authors Bruce P. Ely, James E. Long Jr., and William T. Thistle II summarized the ADOR’s “Analysis of Federal Tax Law Revisions on the State of Alabama” that resulted from the Tax Cuts and Jobs Act of 2017, commonly known as federal tax reform, and how those changes will likely affect Alabama taxpayers.

The Alabama Society of CPA’s also released the report.

The ASCPA has asked the ADOR to establish a working group to study to simplify the state individual income tax system by adopting federal adjusted gross income as the starting point. (Here is a link to a 50-state impact analysis of the federal law.)

The Bradley authors included an executive summary and note the document is preliminary and subject to change, for example if the Alabama Legislature responds. “The ADOR seeks input from the business and tax practitioner community,” they wrote.

Bradley said there may be activity when the Legislature convenes in March, either to de-couple from certain TCJA provisions, add certain provisions that the ADOR analysis points out were not automatically incorporated into Alabama tax law, and perhaps enact a major rewrite of the FIET.

Bradley advised tax specialists and preparers to monitor the ADOR website for guidance, proposed regulations, and updates.