MONTGOMERY, Ala. – Lawmakers are again discussing adding a fee on money transfers from Alabama to people abroad.
House Bill 585, sponsored by Rep. Jennifer Fidler, R-Silverhill, establishes a 1.5% transaction fee on all outgoing international electronic wire transfers made through money transmission businesses. Alabamians who pay income taxes would be eligible to recoup the fee amount through an income tax deduction of up to $5,000.
The money the state would collect through the fee would be distributed to sheriffs’ departments “to offset costs relating to enforcement of immigration laws.” The bill’s fiscal note does not provide any estimates about how much money the fee might generate.
Fidler carried a similar bill last session that proposed a 4% international transaction fee for the money transfers. The House passed that bill, but it never made it to a Senate committee.
In a committee meeting Wednesday, she said that the purpose of the bill was to “reduce communities’ burdens.” Fidler later said the burdens were related to the “influx of people.”
Last year’s bill was introduced as part of a legislative package targeting illegal immigration that was designed to complement President Donald Trump’s crackdown effort.
Also leftover from last year is Rep. Ernie Yarbrough’s House Bill 13 to expand state and local law enforcement’s power in enforcing federal immigration law. The bill was approved by the House on Tuesday and would enable state and local law enforcement agencies to enter into a memorandum of agreement with any federal agency “for the purpose of enforcing federal immigration and customs laws and the detention, removal, and investigation of illegal aliens and the immigration status of any individual in this state.”
But some lawmakers questioned the need for Fidler’s bill this year because the One Big Beautiful Bill Act established a 1% tax on international transfers, which went into effect at the beginning of the calendar year. The proposed state transaction fee would be in addition to the federal government’s tax.
House Majority Whip James Lomax, R-Huntsville, asked if the bill is still needed, saying that the federal government has “cracked down” on “the programs that brought a lot of people here.”
Fidler responded that though things have changed in the immigration enforcement landscape, communities have still felt the “burden” since last session.
The House Financial Services Committee on Wednesday held a public hearing about the bill. Four members of the public spoke against the bill, and no one spoke in favor.
Alison Kinney, who was speaking on behalf of online remittance service Remitly, said the bill would hurt Alabama’s military families.
“Wire transfers are very often used by our service men and women overseas. As you’re aware, we are currently involved in international conflicts as we speak,” Kinney said. “We’re losing soldiers, Alabama soldiers, and these soldiers often don’t make much more than minimum wage. Their families use wire transfers to send them funds. These tax burdens are high for these families, and waiting for a possible tax refund in April leaves them in a more precarious situation than they already face.”
Other opponents argued that it targets immigrants who are in the country legally and already pay income taxes.
Fidler later addressed some opponents’ concerns by sharing that she had worked last year to make sure the fee would not affect missionaries or other people sending money to churches in different countries. The fee would not apply to bank-to-bank transfer or services like Cashapp, which Fidler said many missionaries use.
If passed, the fee would sunset on Dec. 31, 2030.
The committee did not vote on the bill after the hearing, which is standard. Even if the lawmakers approve the bill at the next meeting, Fidler said she doubts the bill could become law this year given there are now seven legislative days left in this session.