MONTGOMERY, Ala. (WIAT) — While it’s still months away, state lawmakers are preparing for next legislative session with bills they hope will improve Alabama.
That includes one to remove municipalities’ occupational taxes over time.
Right now, if your employer is based in one of about 25 cities in the state, you’re paying an occupational tax to that city, even if you don’t live there.
With the rise of remote work and other concerns, Sen. Andrew Jones (R, Centre) wants to eliminate those taxes.
“We’re trying to get people to work. We don’t want to tax them for being employed,” Jones said.
Jones says it’s not just an issue with remote work but for emergency workers who are called in to help.
“It’s just baffling that anybody would be opposed to folks coming in in a time of emergency not having to pay occupational taxes in that municipality,” Jones said.
Jones plans to reintroduce a bill next session phasing out occupational taxes by one tenth of a percent every year until they’re gone. For a city like Birmingham with a 1% rate, that reduction would happen over ten years.
But not everyone is on board.
Alabama League of Municipalities President Greg Cochran says for places that collect that tax, the money makes up 15% to 30% of their revenue in some cases. That revenue goes toward essential services.
“Law enforcement, firefighting, the delivery of clean drinking water, removal of wastewater, making sure that our streets are paid, looking at broadband infrastructure,” Cochran said.
Cochran says should the issue come up next session, he plans to voice the concerns of the communities with that tax, and hopes lawmakers listen.
“It’s been an important revenue stream for them to provide those services, and we would prefer the legislators working together with those local officials instead of hindering them,” Cochran said.
The next legislative session starts in March, and Jones says he’s optimistic his bill gets through this time. Last session it didn’t make it out of the Senate.