News Alabama Senate Gives Final Passage to Occupational Tax Bill

Alabama Senate Gives Final Passage to Occupational Tax Bill

Alabama Senate Gives Final Passage to Occupational Tax Bill
February 28, 2020 |

The Alabama Senate gave final passage Thursday to a bill requiring the Alabama Legislature to approve local legislation before cities can enact occupational taxes. 

HB 147 by Rep. Chris Sells, R-Greenville, does not impact current occupational taxes but is retroactive to Feb. 1, which would prevent the City of Montgomery from enacting a 1% tax approved by the City Council Feb. 18. Similar legislation passed the Senate last year.

Supporters of the bill argued occupational taxes represent taxation without representation because they are levied against all employees, including those unable to vote in city elections. In Montgomery, the City Council rushed to pass a tax ordinance ahead of the Senate vote despite overwhelming opposition from those who work in the Capitol City.

Alabama Farmers Federation and Alfa Insurance President Jimmy Parnell said organization leaders met repeatedly with the mayor and City Council to explore solutions to Montgomery’s challenges. 

“Alfa is committed to making Montgomery a better place to live, work and raise our families. However, we are deeply concerned about the financial burden an additional 1% tax would place on our hardworking employees,” said Parnell. 

Alfa and the Federation are headquartered in Montgomery. Parnell said the organization has invested millions in the city over the last 99 years.

HB 147 passed the Senate by a vote of 27-7 and now heads to Gov. Kay Ivey for her signature. If enacted, the new law could face a court challenge. Montgomery’s occupational tax is set to go into effect next year. 

Sen Clyde Chambliss, R-Prattville, carried the bill in the Senate. He told reporters HB 147 is meant to ensure taxpayers have representation in decisions impacting their finances.

“It is inseparably essential to the freedom of a people and rights of Alabamians that no taxes be imposed on them but without their consent,” said Chambliss. “This bill does not prohibit an occupational tax. It does not unduly restrict occupational taxes. It simply gives those subjected to the occupational tax a vote.”

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