HB328 Alabama 2012 Session

Summary

Primary Sponsor

Artis McCampbellRepresentative

Democrat

Co-Sponsors

Chad FincherPhil WilliamsRichard J. LairdAlan BootheElaine BeechMark TuggleDavid Sessions

Session

Regular Session 2012

Title

Taxation, income tax credit for purchase and installation of irrigation systems, water wells and reservoirs by agricultural entities

Summary

Provides Alabama agricultural businesses a 20% income tax credit (up to $10,000) for purchase and installation of qualified irrigation equipment and reservoirs or water wells, and allows expensing under IRC 179 for irrigation equipment.

What This Bill Does

For tax years after 2011, eligible agricultural trades or businesses may elect to expense qualified irrigation equipment under IRC §179. They can also claim an income tax credit equal to 20% of the cost of purchasing and installing qualified irrigation equipment and related conversion costs, including reservoirs, up to $10,000 per year and limited to the taxpayer's Alabama income tax liability. The credit is taken in the year the asset is placed in service and is limited to one purchase/installation or one reservoir per taxpayer. Surface water systems have additional rules about using a qualified reservoir, and groundwater systems do not require a reservoir.

Who It Affects

• Alabama agricultural trade or business entities (farms and related agribusiness) that purchase qualified irrigation equipment, reservoirs, or water wells and may claim the credit or elect IRC §179 expensing.
• Alabama income taxpaying individuals or businesses connected to agricultural trades, who are limited by the credit's cap ($10,000 per year) and by the requirement that the credit cannot exceed their Alabama tax liability and is claimed in the year of placement.

Key Provisions

• Section 1 defines terms: Agricultural trade or business; Off-stream upland reservoir; Qualified irrigation equipment; Qualified reservoir.
• Section 2 allows an election to expense qualified irrigation equipment under IRC §179 for tax years after 12/31/2011.
• Section 3 establishes a 20% income tax credit for qualified irrigation equipment and reservoirs (and related conversion costs), up to $10,000 per year, limited to the taxpayer's Alabama income tax liability, and taken in the year placed in service; credit is limited to one purchase/one reservoir per taxpayer; includes surface water and groundwater rules.
• Section 4 preserves existing environmental and water laws; does not change those regulations.
• Section 5 requires the Department of Revenue to issue rules and coordinate with the ASWC for technical assistance.
• Section 6 states the act becomes effective immediately upon passage.

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