HB457 Alabama 2012 Session

Summary

Primary Sponsor

Randy Davis

Republican

Co-Sponsors

Harry ShiverJoe FaustAlan BakerSteve McMillan

Session

Regular Session 2012

Title

Taxation, income tax deduction for state sales tax paid on tangible personal property used to retrofit residence of taxpayer, Secs. 40-18-15.4, 40-18-15.5 repealed

Summary

HB457 would create two new Alabama income tax benefits for homeowners: a deduction for state sales tax paid on retrofit purchases to resist windstorms and floods, and a deduction/credit for excess homeowners insurance premiums, while repealing the prior related provisions.

What This Bill Does

Allows an individual to deduct state sales tax paid on tangible property used to retrofit a home to resist hurricane, windstorm, or flood damage, calculated as 4% of the purchase price with a maximum of $1,500, and requires certification by the Department of Revenue. Also allows a deduction/credit for excess homeowners insurance premiums paid for the home, where excess equals premiums over 5% of adjusted gross income, with a maximum of $1,250 and a five-year carryforward for unused amounts. The bill repeals the prior related sections and requires retrofit items to meet specified safety standards (Fortified for Safer Living, ICC codes, or board-approved features); grant funds used for eligible items are in some cases ineligible unless included in the taxpayer’s income.

Who It Affects

• Alabama homeowners who retrofit their primary residence to be more resistant to windstorms and rising floodwaters, who would claim a sales tax deduction up to $1,500 and must meet standards and obtain certification.
• Homeowners who pay property and casualty insurance premiums for their residence and could claim an excess premium deduction/credit up to $1,250, with potential five-year carryforward for unused amounts.
• Taxpayers and tax preparers in Alabama who must apply the new rules and may need to verify certification when requested by the Department of Revenue.

Key Provisions

• Section 1 creates a state income tax deduction for state sales tax paid on tangible personal property used to retrofit a residence to resist windstorm or flood damage; the deduction is 4% of the purchase price, with a $1,500 maximum; costs may include ordinary repair, replacement, and upgrades and must meet specified safety standards; certification can be requested by the Department of Revenue; grant funds are not eligible unless included in the taxpayer's income.
• Section 2 creates a deduction/credit for excess insurance premiums paid for property and casualty coverage on the residence; excess equals premiums above 5% of the taxpayer's adjusted gross income; the maximum deduction/credit is $1,250 per tax year, with unused amounts carryable forward for five years.
• Section 3 repeals Sections 40-18-15.4 and 40-18-15.5 of the Code (the prior related provisions).
• Section 4 states the act becomes effective immediately upon passage and approval.

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

Subjects

Income Tax