The Alabama Senate Tuesday afternoon carried over legislation that would significantly overhaul the tax appeals process in the state, following a lengthy debate on the floor.
The bill, sponsored by Rep. Paul DeMarco, R-Homewood and a Republican priority for the session, was passed by the House on January 19. Senate President Pro Tem Del Marsh, R-Anniston, who moved to carry it over, said after the motion he planned to meet with concerned senators Wednesday.
“We’ll have dialogue with several senators tomorrow, with the hope of bringing it up on Thursday,” he said.
Appeals of taxes are currently by the Department of Revenue’s Administrative Law Division. DeMarco’s bill, supported by groups including the Business Council of Alabama, would create a new Alabama Tax Appeals Commission, which could have up to three judges, appointed by the governor. According to the Legislative Fiscal Office, the commission would still see funding come through the Alabama Department of Revenue’s Administrative Fund.
According to DOR, its Administrative Law Division handled 1,327 cases in 2013. Carla Snellgrove, a spokeswoman for the department, said in a statement the department had not taken a position on the bill, but believed their current process was “fair, effective and independent,” and noted that Chief Administrative Law Judge Bill Thompson had been honored nationally for his efforts.
“As the ALJ is organized now, the office is independent from the ADOR’s organization,” the statement said. “The office of the ALJ is located in a separate building from ADOR offices. The ALJ staff have complete autonomy in setting schedules, hearings, etc.”
The court could also handle local tax cases, though local governments would have the option to opt out of the state process.
The bill would also significantly expand the time for appeals of tax appeals — up to a combined 120 days for appeals of preliminary and final assessments. It would also void preliminary assessments over five years old, which the Department of Revenue says would put $21 million in preliminary tax assessments in jeopardy. Snellgrove said the department would either be forced to void those assessments or impose final assessments, which could lead to litigation.
“To the best of our knowledge, there have been no complaints about the Administrative Law Division process,” she said in the statement.
Sen. Bryan Taylor, R-Prattville, said he had complete faith in the current process, but said taxpayers would feel assured if the appeals went to an independent body.
“This ensures the taxpayers of Alabama will have an independent, impartial tribunal where they may appeal assessments by the Department of Revenue, and cities and counties that choose to use this process,” he said.
However, the scope of the bill — roughly 97 pages long — made a number of Republican senators uneasy. Sen. Paul Sanford, R-Huntsville, attempted to introduce a substitute that would have strictly limited the bill to create an independent tribunal, without some of the other elements of the legislation. The substitute was tabled on a 16 to 13 vote.
Sen. Bill Hightower, R-Mobile, who voted against tabling Sanford’s substitute, said senators needed time to understand the legislation.
“Somebody thought it was kind of like an Obamacare deal, where there’s this huge bill and no one’s read it,” he said. “It’s difficult to discern.”
Democrats questioned the need for the legislation, and expressed concerns that the bill was aimed at creating business for tax attorneys and accountants.
“This is not streamlining government, this is creating more government,” said Sen. Quinton Ross, D-Montgomery.
Marsh said he believed he could resolve the concerns of the different senators.
“There’s a bill somewhere between that substitute and the regular bill that will work,” he said.
– posted by Brian Lyman