Score – State of Alabama 0: Big Business 21 Million
Did you know that under certain conditions, a business owner making $21 milion in revenue in three states, including Alabama, doesn’t owe any Alabama income taxes on the $21 million earned? Not possible you say? Here’s how…
A business owner may file his (or her) $21 million in business income ($7 million in three states) on a personal state income tax return. He may fully deduct the near $6.9 million required in federal income taxes on the total income, from the mere $7 million made in Alabama. Plus, he may also deduct his personal exemptions and itemized deductions, roughly $1.4 million. After so doing, our taxpayer has creatively adjusted the $7 million made in Alabama to a negative $1.2 million in taxable income. So, what does he now owe the State of Alabama – $0 – not one single cent!
We know, it sounds like a bad riddle. Remember the ones…a train leaves point A at 2 a.m…
To read Knight’s press release outlining the loss of millions in dollars of state income tax revenue, click here.
Add comment April 7th, 2009
