HB199 Alabama 2012 Session

Summary

Primary Sponsor

Richard Lindsey

Democrat

Session

Regular Session 2012

Title

Corporate income tax, taxpayer who is part of unitary business, taxable income to include any amounts in excess of federal domestic production activities deduction, Revenue Commissioner authorized to require additional information in alternative reporting format, Secs. 40-2A-17, 40-18-1, 40-18-34 am'd.

Summary

HB199 would define unitary business, require combined reporting for unitary groups to compute Alabama taxable income, and cap certain federal tax deductions (DPAD and bonus depreciation) used in calculating Alabama taxes.

What This Bill Does

If enacted, the bill defines unitary business and requires taxpayers that are part of a unitary group to file a combined report to determine Alabama taxable income. The combined report would include all unitary members operating in the U.S. or in OECD-designated tax havens, with Alabama income apportioned using a group-wide formula. It also restricts how federal deductions are treated: the domestic production activities deduction (DPAD) is limited to 3% of the lesser of qualified production activities income or taxable income, and the bonus depreciation deduction is limited to 50% of the adjusted basis of qualified property; any excess amounts would be added back to Alabama taxable income. The Revenue Commissioner would issue rules detailing the combined-report calculations and enforcement.

Who It Affects

• Group 1: Corporations that are part of a unitary business with multiple entities, who would be required to use a combined report to determine Alabama taxable income.
• Group 2: Corporations that claim DPAD or bonus depreciation deductions, whose Alabama tax deductions could be capped (3% for DPAD, 50% for bonus depreciation) and any excess amounts added back to Alabama taxable income.

Key Provisions

• Defines 'unitary business' for Alabama income tax purposes and states it will be interpreted broadly.
• Requires unitary business taxpayers to file a combined report to determine Alabama taxable income; includes all U.S. members and those commercially domiciled in OECD-designated tax havens; income is apportioned to Alabama using a group-wide formula; the Department of Revenue will publish necessary rules.
• Adds to federal taxable income for Alabama tax purposes: (a) DPAD amounts in excess of 3% of the lesser of qualified production activities income or taxable income, beginning 2012, and (b) any amount of bonus depreciation under §168 in excess of 50% of the adjusted basis of qualified property, beginning 2012.
• Caps the DPAD deduction at 3% and caps the bonus depreciation deduction at 50% of the adjusted basis; excess amounts are added back to Alabama taxable income.
• Effective immediately upon passage and approval, with the state Revenue Commissioner empowered to implement the necessary regulations.

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