HB207 Alabama 2013 Session

Summary

Primary Sponsor

Thomas JacksonRepresentative

Democrat

Session

Regular Session 2013

Title

Corporate income tax, taxable income to include any amounts in excess of federal domestic production activities deduction, Sec. 40-18-34 am'd.

Summary

HB207 would cap Alabama's domestic production activities deduction for corporate income tax at 3% and require adding back excess federal §199 deductions to Alabama income.

What This Bill Does

The bill amends Section 40-18-34 to limit the deduction for domestic production activities to 3% of the lesser of qualified production activities income or taxable income. It also states that for taxable years after 2012, any amount deducted under 26 U.S.C. §199 that is more than 3% of the lesser of QPAI or TI must be added back to Alabama taxable income. This reduces the benefit of the federal DPAD for Alabama taxpayers and can raise Alabama corporate tax for those with large §199 deductions.

Who It Affects

• Corporations subject to Alabama corporate income tax that currently use the domestic production activities deduction; their Alabama DPAD would be limited to 3% of QPAI or TI.
• Corporations that claim the federal §199 deduction; any excess over 3% of the lesser of QPAI or TI must be added back to Alabama taxable income.

Key Provisions

• Limit the domestic production activities deduction to 3% of qualified production activities income or taxable income, whichever is less.
• For taxable years beginning after December 31, 2012, any amount deducted under 26 U.S.C. §199 that exceeds 3% of the lesser of qualified production activities income or taxable income must be added back to Alabama taxable income.
• Effective date: immediately following its passage and approval by the Governor.

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