HB299 Alabama 2011 Session

Summary

Primary Sponsor

Richard Lindsey

Democrat

Session

Regular Session 2011

Title

Corporate income tax, taxable income to include any amounts in excess of federal domestic production activities deduction, Sec. 40-18-34 am'd.

Summary

HB299 would cap Alabama’s domestic production activities deduction in the corporate income tax at 3% of the lesser of qualified production activities income or taxable income.

What This Bill Does

It amends Section 40-18-34 to limit the DPAD deduction to 3% of the lesser of qualified production activities income or taxable income for tax years beginning on or after January 1, 2012. Any amount deducted under 26 U.S.C. §199 beyond that 3% cap would be added back to Alabama taxable income. This change could reduce the value of the DPAD deduction for many Alabama corporations and would apply immediately after passage.

Who It Affects

• Alabama corporations subject to the state corporate income tax that use the domestic production activities deduction, who would face a 3% cap on the deduction based on qualified production activities income or taxable income.
• Alabama Department of Revenue and tax professionals who prepare corporate tax returns, who must apply the cap and adjust filings accordingly.

Key Provisions

• Cap the DPAD deduction at 3% of the lesser of qualified production activities income or taxable income for tax years beginning on or after January 1, 2012.
• Any DPAD deduction amount in excess of the 3% cap must be added back to Alabama taxable income under Section 40-18-34.
• Effective date: immediate following passage and approval by the Governor, or otherwise becoming law.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation