Alabama legislature passes SB 122 to exempt remote workers from state income tax

The Alabama House of Representatives convened on April 24, 2025, to discuss several key legislative matters, including the passage of significant bills related to education and income tax regulations.

One of the notable discussions centered around the adoption of a bill related to the Southern Preparatory School, which was originally chartered by the Alabama legislature in 1901. The school’s mission remains focused on providing secondary education to those eager to learn and improve themselves. The bill was adopted unanimously, with 103 votes in favor and none against.

Another major topic was Senate Bill 122, which aims to amend Alabama's income tax laws. Representative Jeremy Garrett introduced a substitute for this bill, which proposes that individuals working in Alabama for 24 days or fewer within a year would be exempt from state income tax. This change addresses complications faced by remote workers and those attending conferences in Alabama, who are currently subject to income tax regardless of the duration of their work. The bill aligns with national tax models and aims to simplify compliance for out-of-state employers.

Additionally, the bill includes provisions for disaster relief workers, clarifying that compensation received by these individuals from out-of-state employers would not be subject to Alabama income tax. The bill passed with 102 votes in favor and none against, reflecting strong bipartisan support.

These legislative actions highlight ongoing efforts in Alabama to adapt tax regulations to modern work practices and support educational institutions, ensuring that both workers and students can thrive in the state.