Bill > SB71

This bill modifies Alabama's income tax law to provide a tax exemption for civilian employees of the U.S. Department of Defense or Armed Forces in specific circumstances. Under the proposed changes, income earned by these civilian employees will be exempt from Alabama state income taxes when the individual is: (1) in a combat zone designated by a presidential executive order, (2) deployed outside the United States, or (3) activated by the Governor of Alabama or the President of the United States to support emergency responses within or outside the country. The bill clarifies that while federal employees' salaries are generally subject to Alabama state income tax, this specific category of civilian defense workers will receive a special tax exemption. The provisions of this bill will apply to tax years beginning on or after January 1, 2026, and will become effective on that same date, providing a clear timeline for implementation of the new tax exemption.

Budget and Finance

https://alison.legislature.state.al.us/bill-search