SB48 Alabama 2012 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Co-Sponsor

Bill Holtzclaw

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

SB48 would overhaul Alabama's income tax capital credit for qualifying projects by extending the time to claim credits, allowing unused credits to be carried forward (up to four years based on project size), and clarifying pass-through tax treatment for investors.

What This Bill Does

It extends the period during which capital credits can be claimed and allows unused credits to be carried forward for up to four taxable years, with carry-forward length depending on the project's capital cost. It also lets the initial start of the 20-year credit period be delayed by up to three years after the qualifying project is placed in service. The bill preserves pass-through treatment for investors (individuals, corporations, trusts, etc.) and allows credits to be used as nonrefundable estimated tax payments, without changing the overall 20-year limit. It introduces caps on the amount of credit based on project type and size and includes specific rules for financial institutions and ownership requirements.

Who It Affects

• Investing companies and their owners, partners, members, or beneficiaries who would receive capital credits against their Alabama tax liabilities (personal, corporate, or pass-through) and who allocate credits to individuals or entities as permitted.
• Alabama financial institutions that invest in qualifying projects and may receive credits against the financial institution excise tax, subject to ownership thresholds and project eligibility.

Key Provisions

• Carry-forward extension: unused credits may be carried forward up to four taxable years, with limits based on capital costs (≥$400M = 4 years; $300–<400M = 3 years; $200–<300M = 2 years; $100–<200M = 1 year; < $100M = no carry-forward).
• Delayed start: the initial utilization of the credit may be delayed up to three years after the qualifying project is placed in service, after which the 20-year period begins.
• Pass-through credits: the credit is allocated to owners and investors in investing companies (including individuals, C corps, S corps, trusts, etc.) and can apply against their respective taxes, as described in the bill.
• Nonrefundable estimated tax payments: eligible shareholders/owners may elect to apply a portion of their credit as a nonrefundable estimated tax payment, without enlarging the 20-year credit period.
• Credit caps by project type: the credit amount allowed for certain energy projects is capped at 60% of what would otherwise be due for coal gasification/hydropower; other eligible alternative-energy projects have an 80% cap.
• Financial-institution credit rules: investing financial institutions may receive the credit against the financial institution excise tax if they own at least 50% of the investing company or meet other ownership conditions; reporting exclusions apply for the project.
• Overall tax liability limit: the credit in any tax year cannot exceed the amount that would otherwise be due after deductions, losses, and other credits, as determined by the applicable tax rate.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation