Senate Committee Listens to Business and Rejects Arbitrary Tax Increase

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday correctly defeated arbitrary tax increase legislation that the Business Council of Alabama and the state’s business community has opposed for years.

The committee voted 12-2 not to advance the Mandatory Unitary Combined Reporting bill, SB 67 by Sen. Linda Coleman-Madison, D-Birmingham.

The BCA, the Business Associations’ Tax Coalition, and the broader business community have maintained long-standing opposition to MUCR.

“The members of the committee are to be commended for their correct decision to defeat this legislation,” BCA President and CEO William J. Canary said in a statement. “We thank them for their courageous stance and for listening to our concerns.”

Speakers opposing the MUCR included Rick Davis of the Birmingham Business Alliance, McWane Chief Financial Officer Charles Nowlin, Jim Searcy, executive director of the Economic Development Association of Alabama, and Manufacture Alabama President George Clark.

Davis said the BBA is working two business projects that have stated they would avoid Alabama if MUCR becomes law.

Nowlin said McWane, a company founded in Alabama and which operates internationally, believes that a fair state tax structure is vital to continued success.

Searcy said MUCR would be “extremely detrimental” to Alabama’s economic development efforts because it would make Alabama an island in the Southeast regarding economic development and would chill efforts to work with existing Alabama companies to create additional jobs and investment.

“The Legislature has worked to create a positive economic development environment by passage of a sustainable incentives package in 2015 and the passage of a ‘Right-to-Work’ amendment in 2016,” Searcy said in prepared remarks. “This bill would have an effect that would be as harmful as ceasing to be a ‘right-to-work’ state or ending meaningful incentives.”

Canary has said that Mandatory Unitary Combined Reporting is nothing more than an arbitrary tax increase. “It hurts jobs, it hurts income, it hurts economic recruitment and retention, and it creates confusion in the tax code,” he said.

MUCR is costly for business and state government and was simply another effort to expand the bureaucracy and authority of the Alabama Department of Revenue.

“The notion by proponents that it only targets ‘out-of-state corporations’ is complete and utter fiction,” Canary said. “The truth is combined reporting unfairly targets companies in Alabama that provide thousands of quality jobs.”