UPDATE: The grocery tax bill will probably come up again today in the Alabama House. Call your Representative (334-242-7600) especially if he or she is a Republican.
Today in the Alabama House, the bill to remove state sales taxes from food and replace the lost taxes with a removal of the deduction for federal income taxes from the state income tax failed again. And again, the Republicans were responsible, justifying it as an increase in taxes on the middle class. However, this rationale does not explain the role of ALFA in oposing this bill. At one point, John Knight offered an amendment that would continue the deduction for everyone with an income below $600,000 and the Republicans still rejected it. What is realy going on? I think I know read on:
The reason ALFA and other big multi-state business interests oppose the bill is that the Alabama code allows them to deduct their entire federal tax bill from their Alabama income taxes. If a LLC has operations in several states and pays federal taxes on all those operations, their Alabama operation gets to deduct all those other state operation's federal taxes on their Alabama return. I hear that this actually allows the Alabama operation to show no taxable income for Alabama income tax purposes. ALFA oposes it because many of the multi-state farming operations apparently do this.
Now, why don't we hear about this in the Alabama press? How many of them are part of multi-state corporations that in effect get a free ride on Alabama income taxes? That is a good questions to ask your local corporate owned news source.
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