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Gov. Kay Ivey signs exemption of business privilege tax, saving small employers $23M annually

Gov. Kay Ivey on Wednesday signed into law House Bill 391, which eliminates the stateโ€™s minimum business privilege tax levied on small employers.

The bill, sponsored by State Rep. Steve Clouse (R-Ozark) and State Sen. Tom Butler (R-Madison), provides relief to more than 230,000 small businesses.

The law cuts the $100 minimum business privilege tax to $50 beginning in tax year 2023. Once the law goes entirely into effect in 2024, small businesses will be completely exempt from the stateโ€™s minimum business privilege tax.

According to the governorโ€™s office, the exemption is projected to save Alabama small businesses an estimated $23 million annually once fully implemented.

In a statement, Ivey extended gratitude to the tax exemptionโ€™s sponsors for ushering the bill through the legislative process.

โ€œAlabamaโ€™s small businesses are the soul of our economy, and as long as I am your governor, I will continue to be a champion for these hardworking men and women,โ€ declared Ivey in a release. โ€œWe are providing real relief to our small businesses. I commend Chairman Clouse and Senator Butler for their leadership and the Alabama Legislature for their work to support our small businesses. This will go a long way in providing support for some 230,000 small businesses for years to come.โ€

The Alabama Business Privilege Tax presently levies a minimum of $100 annually on corporations, limited liability entities and other businesses in the state. The governorโ€™s office noted that the tax will remain due every registered year until the entity is legally dissolved.

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