Alabama legislature looks to increase income tax deduction for businesses

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April 15, 2011

Alabama

MONTGOMERY, Alabama: This week, the Republican-controlled legislature approved legislation aimed at helping businesses absorb rising health costs.[1]

The bill -- which passed the Senate 29-1 and the House 83-12 -- allows businesses with fewer than 25 employees to deduct 200 percent of their health insurance expenses on state taxes. Currently, the allowable deduction is 150 percent.[2]

The legislation will likely decrease income tax deductions by $10 million per year, according to fiscal analysis.[1] Governor Robert Bentley (R) helped push for the law's passage and is expected to sign the legislation.[3]

During the 2010 state legislative elections, Republicans took back both the Senate and House.

Neither chamber holds elections in 2012, as the senators and representatives both have four-year terms.

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