HB300 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

HB300 would cap Alabama's corporate bonus depreciation deduction at 50% of the adjusted basis and require any excess over 50% to be added back to Alabama taxable income.

What This Bill Does

It amends Section 40-18-34 to limit the federal §168 bonus depreciation deduction for Alabama corporate income tax purposes to 50% of the adjusted basis of qualified property. Any amount deducted under §168 that exceeds 50% would be added to federal taxable income when computing Alabama taxable income, effectively disallowing the 100% deduction at the state level. This change could increase Alabama tax liability for some corporations and takes effect immediately after passage and governor approval.

Who It Affects

• Alabama corporate taxpayers that would otherwise claim the 100% federal bonus depreciation; their Alabama deduction would be limited to 50%, with the excess added back to income.
• Tax professionals and accountants who prepare Alabama corporate tax returns; they must adjust calculations to reflect the 50% limit and the add-back rule.

Key Provisions

• Adds to Section 40-18-34, subsection (e): for taxable years beginning on or after January 1, 2011, any amount deducted under 26 U.S.C. §168 that is in excess of 50% of the adjusted basis of qualified property must be added back to federal taxable income when computing Alabama taxable income.
• Explicitly limits the Alabama deduction for bonus depreciation to 50% of the adjusted basis of qualifying property.
• Effective date: the act becomes law immediately following passage and approval by the Governor.

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