MONTGOMERY, Ala. — A bill that would expand property tax exemptions to non-remarried widows or widowers of eligible Alabamians was discussed Monday by members of the Alabama Department of Revenue Ad Valorem Advisory Committee, some of whom expressed concerns over how the proposal could be implemented.
House Bill 226 would extend the state’s homestead tax exemption, which is currently available to Alabamians over 65 years old, or are disabled or blind, to apply to a widow or widower of an eligible Alabamian, granted they do not remarry. Sponsored by Rep. Danny Crawford, R-Athens, the bill has 16 cosponsors, and passed out of a House committee last week with some minor revisions that imposed stricter eligibility criteria for eligibility.
“Do we have any indication how we’re going to be able to monitor that in our offices as far as marriage certificates, if they get married in another state?” said committee member Dustin St. Clair, president of the Association of Alabama Tax Administrators.
“It just makes us a little nervous; the way we would have to implement it is going to be a nightmare. The original intent of the bill, I agree with, but the way it would open it up to basically everybody, it just makes it tougher.”
Crawford explained his bill to Alabama Daily News on Monday.
“When a 100% disabled person dies, all of a sudden you’re having to come up with $1,000 or $1,500, and that’ll be a hardship on that person,” Crawford said. “So this bill would allow that exemption to extend to that person who is the remaining spouse, as long as they stay unmarried and live in that residence.”
The problem, explained Jennifer Byrd, deputy commissioner of revenue, was that property taxes are handled at the local level, which would potentially pose some challenges to the Department of Revenue in verifying the tax exemption.
“This bill would allow that widow to continue to receive the exemption, (and) it says they have to be unremarried, so if they get married, they lose the exemption,” Byrd told ADN Monday. “The problem is that the paper work that’s required to prove that they still qualify for the exemption (is at the local level).”
Alabama has among the lowest property tax rates in the nation, second only to Hawaii, and collected approximately $553.8 million in property tax revenue in fiscal year 2023. The state saw an estimated loss, however, of $776,423 in property tax revenue that same year from various tax exemptions, deductions and exclusions, including the homestead tax exemption, according to the Legislative Services Agency.
While a fiscal note attached to HB226 does note that the bill could decrease potential property tax revenue, it does not include a specific estimated loss of revenue. The fiscal note also states that the bill could increase costs for the Department of Revenue.
On the concerns expressed by some members of the Ad Valorem Advisory Committee, Crawford said that the requirement that a widow or widower’s name be on the deed of the property, an inclusion that was added to the bill in committee last week via a substitute, the Department of Revenue should not face any hurdles in implementing the bill.
“If the person has their name on the deed and they go to the tax assessor’s office, then they would just extend that exemption to that person,” Crawford said. “And then if they remarried, or left that house, then they would know there’s not an exemption eligible if their address changed. So as long as there is a deed, it can all be handled at the local tax assessor’s office.”