SB204 Alabama 2013 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Co-Sponsors

Gerald O. DialBill HoltzclawTom WhatleyCam WardGerald H. AllenWilliam “Bill” M. Beasley

Session

Regular Session 2013

Title

Agriculture, irrigation equipment, income tax credit for installation of, qualified reservoir defined, carry forward and pass through of tax credits, further provided for, shareholders authorized to claim pro rata share of tax credit, Sec. 40-18-342 am'd.

Summary

SB204 adjusts Alabama's irrigation tax credit by lowering the river/stream flow threshold for reservoir exemption, adding a 5-year carry forward, and allowing pass-through ownership to claim pro rata shares of the credit.

What This Bill Does

It amends the tax credit for qualified irrigation equipment, conversion costs, and reservoirs to include a lower flow threshold (8,000 cubic feet per second) for when a reservoir is not required. It allows the credit to be carried forward for up to five years and lets shareholders or owners of pass-through entities claim their pro rata share of the credit against their own Alabama income tax. The credit is claimed in the year the equipment or reservoir is placed in service, with limits of one purchase or reservoir per taxpayer and a cap of $10,000 per tax year, not exceeding tax liability.

Who It Affects

• Agricultural taxpayers or businesses that buy and install qualified irrigation equipment or reservoirs (eligible for a 20% credit, up to $10,000 per year, with five-year carry-forward and tax liability limit).
• Owners or investors in pass-through entities (such as LLCs, partnerships, or S corporations) who can receive their pro rata share of the credit based on ownership and claim it on their own Alabama income tax.

Key Provisions

• 20% income tax credit for cost of qualified irrigation equipment, conversion costs, and qualified reservoirs; cap of $10,000 per tax year; not to exceed the taxpayer's Alabama tax liability.
• For surface water irrigation, a qualified reservoir is not required if the water source is directly from a river or stream with average annual flow of 8,000 cubic feet per second or more (instead of 10,000 cfs).
• Credit may be carried forward for up to five years after the year the irrigation system or reservoir is placed in service.
• Shareholders, partners, members, or beneficiaries of pass-through entities may claim their pro rata share of the credit against their own tax liability.
• Credit limited to one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.
• Credit is claimed in the year the equipment or reservoir is placed in service.
• Effective date: the act becomes law on the first day of the third month after governor's approval.

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

Subjects

Agriculture