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AlabamaHB3792025 Regular SessionHouseWALLET

Income tax, remote workers exempt under defined circumstances

Sponsored By: Danny Garrett (Republican)

Enacted

Taxation & Revenue

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Alabama tax break for visiting workers

For tax years beginning January 1, 2026, qualifying nonresidents owe no Alabama income tax on short-term work there. Workers must work in Alabama 30 days or fewer during the calendar year and also work in another state. Their home state must offer a similar exclusion or have no individual income tax; alternatively, federal law must exempt the income. Pay for work as a professional athlete, professional entertainer, or public figure does not qualify. Employers need not withhold Alabama tax on qualifying pay. Above 30 Alabama workdays, employers must withhold and send in tax for every Alabama workday, including the first 30. Transit time does not count toward work locations. Generally, a day counts where the most duties occur; days split between Alabama and only one other state count elsewhere. The act itself takes effect October 1, 2025.

Alabama tax relief for emergency workers

For tax years beginning January 1, 2026, qualifying temporary nonresident emergency workers' wages are exempt from Alabama state and local taxes. Their work must respond to a disaster or emergency declared by the President or Alabama's governor. Employers do not have to withhold or send in tax on that pay. This separate exemption adds to existing disaster-work exemptions without narrowing them.

Employer penalty relief with tracking rules

For tax years beginning January 1, 2026, employers receive protection from withholding penalties and interest when using qualifying work-location information. Employers with qualifying time-and-attendance systems must use their data to assign wages among states for income tax. Those systems must record work locations as work occurs on days outside an employee's main work state. Employers without such systems may use employees' annual estimates of expected Alabama workdays. Estimate-based protection does not apply when employers know of employee fraud or collude with employees to evade tax. This protection does not change employees' tax bills, and Alabama's Department of Revenue must adopt rules to administer the section.

Sponsors & Cosponsors

Sponsor

  • Danny Garrett

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 444 • No: 0

Senate vote • 5/6/2025

Motion to Read a Third Time and Pass - Adopted Roll Call 966

Yes: 34 • No: 0

House vote • 4/24/2025

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1010

Yes: 103 • No: 0

House vote • 4/24/2025

Motion to Adopt - Adopted Roll Call 1009

Yes: 103 • No: 0

House vote • 4/24/2025

Motion to Adopt - Adopted Roll Call 1008

Yes: 102 • No: 0

House vote • 4/24/2025

Third Reading in House of Origin

Yes: 102 • No: 0

Actions Timeline

  1. Enacted

    5/14/2025House

  2. Motion to Read a Third Time and Pass - Adopted Roll Call 966

    5/6/2025Senate

  3. Ready to Enroll

    5/6/2025House

  4. Enrolled

    5/6/2025House

  5. Signature Requested

    5/6/2025Senate

  6. Delivered to Governor

    5/6/2025House

  7. Read for the Second Time and placed on the Calendar

    5/1/2025Senate

  8. Reported Out of Committee Second House

    4/30/2025Senate

  9. Third Reading in House of Origin

    4/24/2025House

  10. Ways and Means Education Engrossed Substitute Offered

    4/24/2025House

  11. Motion to Adopt - Adopted Roll Call 1008

    4/24/2025House

  12. Garrett 1st Amendment Offered

    4/24/2025House

  13. Motion to Adopt - Adopted Roll Call 1009

    4/24/2025House

  14. Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1010

    4/24/2025House

  15. Engrossed

    4/24/2025House

  16. Read for the first time and referred to the Senate Committee on Finance and Taxation Education

    4/24/2025Senate

  17. Pending Committee Action in Second House

    4/24/2025Senate

  18. Read for the Second Time and placed on the Calendar

    4/17/2025House

  19. Ways and Means Education 1st Amendment

    4/16/2025House

  20. Ways and Means Education 2nd Amendment

    4/16/2025House

  21. Reported Out of Committee House of Origin

    4/16/2025House

  22. Read for the first time and referred to the House Committee on Ways and Means Education

    3/4/2025House

  23. Pending Committee Action in House of Origin

    3/4/2025House

Bill Text

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