United States

Alabama: Financial Institution Apportionment Regulations No Longer Required to Mirror the Multistate Tax Commission’s Model Regulations

May 16, 2016
From KPMG TaxWatch

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Alabama House Bill 451, which has been sent to the Governor, removes the statutory requirement that Alabama’s Financial Institutions Excise Tax allocation and apportionment regulations comport with the Multistate Tax Commission’s model regulations for apportioning the income of a financial institution. Currently, Alabama’s rules must be substantially the same as those issued from time to time by the MTC. Last year, after much debate, the MTC amended its model financial institution apportionment regulation effective January 1, 2016. Among other changes, under the revised regulation, the so-called SINAA factors for sourcing loans to the property factor were eliminated and the sales factor provisions were revised to reflect the MTC’s move to market sourcing. The Alabama Department of Revenue had proposed to amend its Financial Institution Excise Tax apportionment regulation accordingly, but the amended rule has not yet been finalized and the enactment of House Bill 451 may present opportunities for the Department to make further changes. Please stay tuned to TWIST for future updates on Alabama’s financial institution allocation and apportionment regulations.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.