HB140 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Mike Millican
Republican
Co-Sponsors: Terri Collins William Roberts Dan Williams Paul W. Lee April Weaver Barry Moore Ed Henry Wes Long Becky Nordgren Mac Buttram Kurt Wallace Donnie Chesteen Jim Patterson Kerry Rich K.L. Brown Greg Wren Lesley Vance Mac McCutcheon Victor Gaston Mike Ball Jack Williams Harry Shiver Chad Fincher Steve McMillan Randy Wood Steve Clouse Duwayne Bridges Howard Sanderford Micky Hammon Wayne Johnson
Session: Regular Session 2012
Title: Income tax credit for qualifying projects or new or expanding businesses creating new jobs, tax credits claimed authorized to be carried over up to four tax years, Sec. 40-18-194 am'd.
Summary: HB140 updates Alabama's income tax capital credit for qualifying new or expanding businesses by extending when credits can be claimed, allowing longer carry-forward for large projects, and clarifying how credits are allocated across different business structures.
What This Bill Does
It extends the time period you can claim the capital credit and lets certain projects carry the credit forward for up to four taxable years, based on how big the project costs are. The credit is allocated to owners and entities across various tax types (individual, corporate, and financial institution taxes) according to the investing company's structure (sole proprietorship, C or S corporation, partnership/LLC, or trust). It adds a special framework for financial institutions that own the project to receive credits against the financial institution excise tax if the project fits (such as a data center or headquarters). The amount of credit in any year cannot exceed the tax otherwise due and is capped differently depending on project type (60% for coal gasification/hydropower/advanced fossil generation; 80% for other alternative energy projects), with the possibility to delay initial use up to three years and a total credit period of 20 years; large projects (≥100 million in capital costs and ≥100 new jobs) can carry forward for up to four years with thresholds by cost level.

Who It Affects
Investing companies (including sole proprietorships, LLCs, partnerships, and corporations) and their owners, partners, or beneficiaries, who would receive and apply the capital credits against the appropriate tax.
Financial institutions that own or substantially control an investing company and meet ownership requirements, eligible for credits against the financial institution excise tax for qualifying projects.

Key Provisions
Extends claim period and allows carry-forward of the capital credit for up to four taxable years based on project cost and job creation.
Allocates credits to investing company owners and entities for the appropriate taxes (individual, corporate, or financial institution taxes) depending on the entity type (proprietorship, C corp, S corp, partnership/LLC, trust/estate, and beneficiaries).
Adds special credit provisions for investing financial institutions, including eligibility for credits against the financial institution excise tax for specific project types (data centers, HQ facilities) with ownership requirements.
Credit cannot exceed the amount otherwise due to the state in tax for the year and is capped at 60% of that amount for coal gasification/hydropower/advanced fossil generation or 80% for other types of alternative energy projects.
Delays the initial utilization of the credit up to three years after the project is placed in service, with a total credit period of 20 years from that point.
Large projects meeting criteria of at least $100 million in capital costs and at least 100 new jobs may carry forward the credit for up to four years, with specific year-by-year carry-forward limits (100–199m: 1 year; 200–299m: 2 years; 300–399m: 3 years; 400m+: 4 years).
An annual election allows the credit portion to be used as a nonrefundable estimated tax payment, without increasing the overall 20-year limit.

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