SB119 Alabama 2013 Session

Summary

Primary Sponsor

Mark Slade Blackwell

Republican

Co-Sponsors

Del MarshGerald O. DialDick BrewbakerShadrack McGillGreg J. ReedJ.T. WaggonerJerry L. FieldingGerald H. AllenRusty GloverCam WardBryan TaylorPhillip W. WilliamsTom Whatley

Session

Regular Session 2013

Title

Tax credit, investment in Alabama entrepreneurial business

Summary

SB119 creates the Early Stage Investment Act to offer a refundable income tax credit to investors who fund qualifying Alabama entrepreneurial businesses, with defined eligibility, amounts, and administration rules.

What This Bill Does

It establishes a program where qualified investors can claim a refundable tax credit against Alabama tax liabilities for investments in Alabama entrepreneurial businesses. The credit equals 50% of the investment, paid over five years, with a $100,000 per-year per-business limit and a $10 million annual cap on total credits. The Alabama Department of Commerce administers the program, issues tax credit vouchers, and require annual reporting from recipient businesses. Investments must be at risk, not financed by other incentive programs, and proceeds must be used for approved business activities; the act takes effect for tax year 2014.

Who It Affects

• Qualified investors (individuals or entities) who invest in Alabama entrepreneurial businesses, who may receive a transferable refundable tax credit equal to 50% of the investment, spread over five years, subject to annual and per-business limits.
• Alabama entrepreneurial businesses that meet the eligibility criteria and receive investments, which gain access to capital, must use proceeds for approved purposes and provide annual performance reports to the Department of Commerce.

Key Provisions

• Establishes the Early Stage Investment Act to provide a refundable income tax credit for investments in Alabama entrepreneurial businesses.
• Defines Alabama entrepreneurial business criteria: domiciled and operated in Alabama, ≤20 full-time employees, < $500,000 in gross revenues previous year, < $1,000,000 raised in funding, not in excluded industries, in business <3 years, and principal operations in Alabama.
• Qualifying investments must be at risk, not secured or guaranteed, not funded through other Alabama incentive programs unless approved, and not controlled by principal owners (50%+ ownership). Proceeds must be used for allowed purposes (capital improvements, equipment, R&D, working capital) with restricted uses unless approved.
• Credits are earned as a percentage of investment (50%) and payable over five tax years, with a maximum of $100,000 per year per business, and a total annual program cap of $10,000,000.
• Administered by the Alabama Department of Commerce, which issues tax credit vouchers, certifies eligibility, and requires annual reports from recipient businesses on use of funds, employment, payroll, revenue, jobs created, and related metrics.
• Credits are transferable and may be carried forward for 10 years; taxpayers claim credits on the appropriate tax return based on entity type (individual, corporate, trust/estate, or pass-through).
• Effective date: credits apply to tax year beginning January 1, 2014 and continue thereafter.

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

Subjects

Tax Credits