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MONTGOMERY, Ala. (WHNT) — On Thursday, the Alabama Senate voted to eliminate the state’s business privilege tax. The bill, sponsored by Senator Tom Butler (R-Madison), now moves to the House.

If approved by the House and signed by Governor Kay Ivey, the bill would do away with the minimum tax levied on some corporations, business trusts, and both limited liability and disregarded entities. Current law determines the rate based on a taxpayer’s taxable income apportioned and allocated to the state.

“From fantastic musicals to political thriller and iconic lines from the mouth of a mob boss, 1972 gave us fantastic films. Despite different subject matter, the films all share one thing: they turn 50 years old this year,” said Butler. “While our state budgets are robust, there is a real opportunity to provide substantial support by eliminating the business privilege tax, which will result in an annual $23 million tax cut for our small businesses.”

Butler’s bill would lower the minimum business privilege tax from $100 to $50, and give exemptions from the tax from 2024 on.

“Alabama’s economy is strong, and our receipts have increased in both the General Fund and Education budgets, presenting an opportunity to provide a tax break for taxpayers and small businesses,” said Senate President Pro Tem Greg Reed (R-Jasper).

Majority Leader Clay Scofield (R-Guntersville) was also a co-sponsor of the bill.

“I appreciate Senator Butler’s willingness to spearhead this critical relief for Alabamians,” Scofield stated. “I am proud to be a co-sponsor of the bill, and I am pleased with the Caucus’ overall strong appetite on this important endeavor.”