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Last updated 5:40AM ET
March 9, 2021
States Trying Not To Tax Stimulus Checks
(APR - Alabama Public Radio ) - As rebate checks start going out this week in a bid to revive the economy, some states are scrambling to keep the money from being taxed as income.

In Alabama, a tax ranging from 2 percent to 5 percent would eat into those $1,200 checks for a couple, but a bill to avoid such a tax is dying in a legislative impasse.

Most tax experts say the rebates are not 2008 income that can be taxed anyway.

But state Representative Terry Spicer of Elba, the sponsor of one of several bills in the Legislature to remove any possibility of state income taxes being taken from the rebate checks wants to make sure the checks are not taxed.

States that have announced they would not tax the checks include California, Iowa, Louisiana, Missouri, New York, Oklahoma and New Mexico. Another nine states do not have a state income tax.

Most shoppers interviewed Monday at a Montgomery Wal-Mart said they don't want to pay taxes on the rebate checks.

Jeff Emerson, communications director for Riley, said the governor has been under the assumption it would take an act of the Legislature for the state to not tax the checks.

(Copyright 2008 by The Associated Press. All Rights Reserved.)
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