Christian Borek provided Business Alabama with an article on April 13, 2020 discussing Alabama’s recent move to prohibit any municipality from implementing an occupational tax on people conducting business within its city limits without approval from the state legislature. Act No. 2020-14 (the Act) went into effect March 3 and applies to any occupational tax that went into effect on or after February 1.

Cities like Montgomery that have expressed interest in implementing new occupational taxes likely have to live with the change due to restrictions in the state constitution on the ability of municipalities to govern themselves. Overall, businesses and their employees are the beneficiaries of this piece of legislation. “Act 2020-14 will likely make it more difficult for municipalities to pass occupational taxes because any new occupational taxes must be approved by the state legislature,” Borek says. “Not only will this keep money in the hands of employees, but it will also aid in keeping Alabama a competitive, low-tax environment in attracting companies to relocate their operations in this state.

For the full article, please click here.