Alabama Bill Proposes to Create Independent Tax Appeals Commission

Georgia isn’t the only state where a new special tribunal for tax cases is under consideration. In Alabama last week, Representative Paul DeMarco introduced HB 427, or the “Alabama Tax Appeals Commission Act,” an important piece of state tax legislation that would, inter alia:

1. Create a Tax Appeals Commission as a stand-alone executive branch department, independent of the Alabama DOR;
2. Extend the period to appeal an assessment (either preliminary or final) from 30 days to 60;
3. Clarify and amend certain refund procedures, including a specification that filing an amended return with a refund claim does not extend or create a new statute of limitations (overruling the 2000 Dupree decision);
4. Create an appeal right from certain dormant preliminary assessments;
5. Create a process for an expedited revenue ruling, whereby the Alabama Department of Revenue is required to contact the taxpayer (or his or her representative) and issue a ruling within 30 days of the request; and
6. Clarify and amend the imposition, in certain situations, of the penalties for failure to file a return, failure to make timely payment, and understatement of income.

The creation of the independent Alabama Tax Appeals Commission, or “ATAC,” is the headlining proposal in HB 427, and the provisions of the bill creating the Commission largely track the ABA’s “Model State Tax Tribunal Act.” Of great significance is the provision specifying that taxpayers may appeal final assessments of sales, use, rental and lodgings taxes from Alabama’s “home rule” jurisdictions (and, where applicable, their private administration/auditing firms) to the ATAC, unless the jurisdiction opts out of the appeal provision. This provision is seen as a significant victory for taxpayers, who have often been left with no clear path to appeal from local tax decisions with which they disagreed.

The Legislative Fiscal Office has scored HB 427 as “revenue-neutral,” and it has received endorsements from a number of important business and legal interest groups, including COST, the Birmingham Business Alliance, and the Alabama State Bar.

We will post more news regarding the status of this bill as we receive it.