Small business owners/employees to get larger tax deductions
By Daniel L. Bamberg
Alabama Republicans moved to a historic victory over the State House and Senate in November. Since then they have been busy generating their “handshake bills.” These bills are based on promises made during the 2010 campaign, according to House Speaker Mike Hubbard.
On Tuesday, March 1st the Regular Session of Alabama’s legislature convened. When the day was done 6 of 7 bills introduced as part of these “handshakes” passed through committee. Among those was HB 61 sponsored by Bibb County’s own Rep. April Weaver. This bill will allow small business employers and employees to deduct 200% of the amounts they pay in health insurance premiums from their state income tax.
Weaver’s bill along with the other five will move toward final passage which could occur as soon as the end of this week.
“I am personally excited that I got my first bill through committee, but am more excited for what this will me for Alabama’s small businesses,” expressed Weaver. “I agree with Governor Bentley’s idea that small businesses are the engine of economic growth and are the back bone of a robust and vibrant economy.”
The bill is supported by the BCA (Business Council of Alabama). This bill, if made law employers will be about to deduct an additional 150% for every employee earning under $50,000 per year than what their current deduction is. In effect, if a small business owner is currently deducting $120,000 per year for coverage of their employees making under $50,000 – that employer can now deduct $180,000 per year.
An employee earning under $50,000 per year will be able to deduct an additional 50% of what they currently do. In effect, if an employee is normally deducting $3,000 annually will now be able to deduct $4,500.
“In Alabama, a handshake means something,” said Speaker Hubbard. “By getting straight to work moving these reforms through the legislative process, we are proving that we meant what we said in the campaign. Alabamians are accustomed to politicians saying one thing on the campaign trail, then doing another in Montgomery. Last November voters delivered a mandate for change. Today, House Republicans are delivering on our promises to enact conservative, good-government reforms. I commend my fellow members for staying true to our commitments, and coming through for Alabama taxpayers.”
“We’ve said from the beginning that ‘Handshake’ bills would be the first order of business in this session,” explained Hubbard. “Fortunately, much of what was promised in the handshake was passed in last December’s Special Session and is already law. Now it is important to pass these bills in short order so we can attend to the many issues our state faces. I want to thank the sponsors of these bills for working hard to get them through committee. I also want to thank the committee chairs for ensuring a fair, organized and efficient committee hearing for each bill. We’re keeping our commitments and moving Alabama forward,” he concluded.
For more information regarding other “Handshake Bills” please visit www.legislature.state.al.us
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