SB131 Alabama 2013 Session

Summary

Primary Sponsor

Mark Slade Blackwell

Republican

Session

Regular Session 2013

Title

Income tax credit, tax credit against the tax liability of taxpayer for rehabilitation, preservation, and development of historic structures

Summary

SB131 would create a new Alabama state income tax credit to encourage rehabilitation, preservation, and development of historic structures, with defined eligibility, credit amounts, and transfer rules.

What This Bill Does

The bill creates a tax credit for qualified rehabilitations of historic and pre-1936 non-historic structures, with 25% of eligible costs for certified historic structures and 10% for certified pre-1936 non-historic structures. It sets caps on credits, establishes an application and reservation process through the Alabama Historical Commission, and requires a rehabilitation plan and substantial rehabilitation standards. Credits can be transferred or passed through to partners, and unused credits can be carried forward up to 10 years; the program includes recapture rules, ad valorem tax adjustments, and annual reporting to the Legislature. Applications for reservations begin in 2013 with credits to be claimed starting in 2014.

Who It Affects

• Property owners or entities that own qualified structures (including those with long-term leases or purchase options) who plan to rehabilitate or develop historic or pre-1936 non-historic structures and may qualify for a tax credit.
• Investors, partners, or other transferees (including nonprofits) that receive or purchase tax credits and use them to offset Alabama taxes or reassign credits to others.

Key Provisions

• Defines Certified Historic Structure, Certified Rehabilitation, Certified Historic Residential Structure, Qualified Rehabilitation Expenditures, and other key terms used to determine eligibility and credit amounts.
• Credit rates: 25% of qualified rehabilitation expenditures for certified historic structures; 10% for certified pre-1936 non-historic structures; caps of $5,000,000 per year for all non-residential types (and $50,000 for certified historic residential structures).
• Annual credit reservation cap: up to $30,000,000 in total credits reserved per tax year, plus any rescinded earlier reservations; unused credits may be used in future years.
• Application and reservation process: owner must submit rehabilitation plan and estimate; reservations are issued in order received or by lottery if submitted the same day; 18-month window to commence rehabilitation after reservation; 20% of estimated costs must be incurred to begin.
• Completion and certification: after substantial rehabilitation, owner must provide cost/expense certification and, if applicable, an audit and independent appraisal; the commission issues a tax credit certificate within 90 days of receiving documentation.
• Credit transfer: all or any portion of credits may be transferred or assigned; passes through to partners or owners in partnerships or LLCs; transferees may use or re-transfer credits.
• Recapture and basis adjustments: recapture rules follow IRC Section 50; initially awarded owner (not transferee) is liable for recaptured amount.
• Ad valorem tax adjustment: local tax assessor must re-evaluate the structure for ad valorem taxes in the year the rehabilitation is placed in service.
• Fees and reporting: commission may charge up to 1% of qualified rehabilitation expenses (not to exceed $10,000) to process applications; the commission and Department must report annually on economic impact of the program.
• Effective date: applications for reservations start October 1, 2013; credits may not be claimed before tax year 2014; act becomes effective immediately upon passage.

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