Information current as of January 31, 2021.
The SARS-CoV-2 virus and the incidence of COVID-19 are changing life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor™ or visit our COVID-19 Resource Center for current information as needed.
Information Specific to Alabama
- Alabama’s Department of Revenue (DOR) extended the March and April motor vehicle registration and vehicle property tax payment deadlines to May 15.
- Order of the Commission, April 3, 2020 (superseding March 16 order).
- Small businesses that averaged $62,500 or less in monthly retail sales during the previous calendar year may file their monthly sales tax returns for the February, March and April 2020 reporting periods without paying the state sales tax reported as due. Late payment penalties will be waived for these taxpayers through June 1.
- Order of the Commissioner of Revenue, March 18, 2020.
- Late payment penalties for state lodging tax liabilities reported for February, March and April 2020 will be waived through June 1; the return filing deadlines won’t be waived.
- Order of the Commissioner, March 20, 2020.
- Alabama has mirrored the IRS’ return filing and payment extension for income tax and privilege tax to July 15.
- Order of the Commissioner, March 23, 2020.
- Alabama published additional information on tax relief, specifying 1) the income tax return filing or payment deadline is postponed to July 15 from April 15; 2) the due date for extension payments and estimated payments due before April 15 is postponed to July 15; 3) interest and penalties will be charged from July 16 if taxes aren't paid in full; and 4) returns due on March 15, except for composite returns and payments due from pass-through entities, don't qualify for the July 15 extension.
- Alabama DOR Notice, April 2, 2020.
- Alabama further extended the tax filing and payment deadlines for April 1 through July 14 to July 15, 2020, for individual income tax, corporate income tax, financial institution excise tax and business privilege tax. This includes relief for payments of tax on self-employment income and estimated income taxes for the 2020 tax year.
- Order of the Commissioner, April 10, 2020.
- Alabama won’t consider temporary changes in an employee’s physical work location during periods in which temporary telework requirements are in place due to the pandemic to impose nexus or alter apportionment of income for any business.
- Alabama DOR Notice, May 12, 2020.A
- Alabama has addressed tax issues that the Legislature was not able to fully consider during its abbreviated 2020 regular session. The proclamation allows taxpayers to avoid paying state income taxes on certain benefits received under the federal CARES Act. Taxpayers may exclude any tax credits, advance refund amounts, or other direct benefits received under the CARES Act from Alabama income taxation and all calculations in determining the federal income tax deduction for Alabama income tax purposes. Also, taxpayers may exclude any income resulting from a loan forgiven pursuant to the CARES Act from Alabama income taxation and financial institution excise taxation, to the same extent the amount is exempt from federal income tax under the CARES Act and all calculations in determining the federal income tax deduction for Alabama income tax purposes. Income resulting from a loan forgiven pursuant to the CARES Act may only be considered in determining the deductibility of otherwise deductible expenses (such as payroll, utilities, mortgage interest, and rent) allowed to be paid with exempt funds. The expenses are deductible to the same extent they are deductible in calculating federal income tax. In addition, the proclamation extends the Alabama Jobs Act tax credit program (previously set to expire on December 31, 2020) and the Growing Alabama tax credit program (previously set to expire on September 30, 2020) until the Legislature has an opportunity to enact legislation addressing the programs.
- Governor Kay Ivey Proclamation, December 11, 2020.
- Alabama DOR Guidance, December 18, 2020.
- Alabama is extending the deadline for motor vehicle registrations and property tax payments on motor vehicles due to COVID-19. The measures include extending 1) the deadline for vehicle registrations to the last business day of the subsequent month the registration was otherwise due for registrants where the county license plate issuing office was closed during the month the registration was originally due; 2) the 20-day registration requirement where the county licensing office was closed and the registrant didn’t have access to it; 3) vehicle registrations and renewals under the International Registration Plan where the office was closed during the month the registration was originally due; and 4) penalty charges associated with registrations, renewals, and tax payments. The extension of time provided in the Commissioner’s order is valid from January 1 and will expire on June 30.
- Order of the Commissioner of Revenue; January 5, 2021.
- Alabama updated its guidance regarding the tax relief measures contained in Alabama Gov. Kay Ivey’s 21st Supplemental Emergency Proclamation to provide that expenses paid with Paycheck Protection Program (PPP) loan amounts that have been forgiven are deductible in calculating federal taxable income. Because the calculation of Alabama corporate income tax and financial institution excise tax begins with a taxpayer’s federal taxable income, the allowance of these deductions at the federal level will flow through to the taxpayer’s calculation of Alabama taxable income, without the need for any adjustment on the taxpayer’s Alabama return.
- Alabama Department of Revenue (DOR), Guidance Related to Gov. Kay Ivey’s 21st Supplemental Emergency Proclamation; January 6, 2021.