Alabama
Alabama Sunsets its Expensive ‘No Tax on Overtime’ Policy
June 18, 2025 • By Neva Butkus
Exempting overtime pay from income tax has become a hot topic at both the state and federal levels. Alabama became the first state to pass the exemption – albeit temporarily – in 2023. Numerous states and the federal government are considering following their lead, touting it as a way to reward workers and fill labor […]
Alabama Arise: Eliminating State Grocery Tax Would Make Life Better for Alabama Families
February 7, 2022 • By ITEP Staff
Two bills in the 2022 regular session would end the state grocery tax while protecting school funding. The graph below shows how millions of Alabamians would benefit. Untaxing groceries quickly and responsibly would boost economic and food security for all Alabamians. That means replacing revenue for public schools in a way that doesn’t harm struggling […]
Alabama Arise: End Alabama’s state grocery tax and protect school funding
January 30, 2020 • By ITEP Staff
How to untax groceries without costing education a dime It’s crucial to replace the grocery tax revenue without hurting the people who would benefit most from the tax’s elimination. Fortunately, Alabama has a way to untax groceries while protecting both struggling families and education funding. That solution would be to end an unusual tax loophole […]
Alabama Arise: The Less You Make, the More You Pay: Alabama’s Taxes Remain Upside Down
October 17, 2018 • By ITEP Staff
Low-income Alabamians pay twice as much in state and local taxes as a share of their income compared to the state’s wealthiest residents, according to a study released Wednesday, Oct. 17, 2018, by the Institute on Taxation and Economic Policy (ITEP), a nonprofit research organization based in Washington, D.C. The study, Who Pays?, analyzes major state and local taxes in all 50 states, including personal and corporate income taxes, property taxes, sales and other excise taxes.
Twelve States Offer Profitable Tax Shelter to Private School Voucher Donors; IRS Proposal Could Fix This
October 2, 2018 • By Carl Davis
A proposed IRS regulation would eliminate a tax shelter for private school donors in twelve states by making a commonsense improvement to the federal tax deduction for charitable gifts. For years, some affluent taxpayers who donate to private K-12 school voucher programs have managed to turn a profit by claiming state tax credits and federal tax deductions that, taken together, are worth more than the amount donated. This practice could soon come to an end under the IRS’s broader goal of ending misuse of the charitable deduction by people seeking to dodge the federal SALT deduction cap.
The Other SALT Cap Workaround: Accountants Steer Clients Toward Private K-12 Voucher Tax Credits
June 27, 2018 • By Carl Davis
On May 23, 2018, the IRS and Treasury Department announced that they “intend to propose regulations addressing the federal income tax treatment of certain payments made by taxpayers for which taxpayers receive a credit against their state and local taxes.” They made the announcement in response to new “workaround tax credits” enacted in New York […]
Private Schools Donors Likely to Win Big from Expanded Loophole in Tax Bill
December 14, 2017 • By Carl Davis
For years, private schools around the country have been making an unusual pitch to prospective donors: give us your money, and you’ll get so many state and federal tax breaks in return that you may end up turning a profit. Under tax legislation being considered in Congress right now, that pitch is about to become even more persuasive.
Tax Bill Would Increase Abuse of Charitable Giving Deduction, with Private K-12 Schools as the Biggest Winners
December 14, 2017 • By Carl Davis
In its rush to pass a major rewrite of the tax code before year’s end, Congress appears likely to enact a “tax reform” that creates, or expands, a significant number of tax loopholes.[1] One such loophole would reward some of the nation’s wealthiest individuals with a strategy for padding their own bank accounts by “donating” to support private K-12 schools. While a similar loophole exists under current law, its size and scope would be dramatically expanded by the legislation working its way through Congress.[2]
Investors and Corporations Would Profit from a Federal Private School Voucher Tax Credit
May 17, 2017 • By Carl Davis
A new report by the Institute on Taxation and Economic Policy (ITEP) and AASA, the School Superintendents Association, details how tax subsidies that funnel money toward private schools are being used as profitable tax shelters by high-income taxpayers. By exploiting interactions between federal and state tax law, high-income taxpayers in nine states are currently able […]
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