Bill designed to bring fairness to tax appeal process
MONTGOMERY – The Alabama Senate on Thursday passed the “Alabama Taxpayers’ Bill of Rights II,” a measure sponsored by Representative Paul DeMarco (R-Homewood) and Senator Bryan Taylor (R-Prattville) that streamlines the process for taxpayers to appeal both state and local tax assessments and ensures fairness throughout.
“Currently taxpayers must take their appeals to a judge who works for the Department of Revenue,” Taylor said. “That creates the perception, if not the reality, that the outcome may be biased against the taxpayer. The Taxpayers’ Bill of Rights establishes an independent, impartial forum for taxpayers to challenge tax assessments without having to worry that the tax collector has an unfair advantage.”
“This bill will ensure that businesses and individual taxpayers choosing to appeal tax assessments are given a level playing field and referees who will remain neutral from the beginning of the process to the end,” DeMarco said. “This bill can be summed up in two words that are at the core of its intent – simple fairness.”
Under the proposal, the appeals process for tax assessments will be streamlined and made independent of the taxing governments, all of which currently have a vested interest in denying such appeals. Instead, an independent Alabama Tax Tribunal would be tasked with hearing disputes over assessments involving income, privilege, sales, use, rental and lodging taxes issued by the State Department of Revenue, by cities or counties, or by private auditing firms they employ.
To avoid costly duplication, the bill also abolishes the Administrative Law Division of the Department of Revenue and transfers its budget, personnel, equipment and functions to the Alabama Tax Tribunal. Doing so would bring Alabama into conformity with the vast majority of states that have created an independent tax appeals process for both businesses and individuals. The bill has been endorsed by dozens of pro-business organizations that say the bill will help ensure Alabama remains an attractive place to do business and bring jobs.
Passage of the legislation would save both administrative costs and legal fees for Alabama taxpayers pursuing the appeal process, although decisions made by the Tribunal could still be appealed to the circuit courts, as current law allows.
The bill now goes back the House of Representatives for consideration of the substituted version of the bill.