HB36 Alabama 2016 Session

Updated Feb 24, 2026

Summary

Primary Sponsor: Kyle South
Republican
Session: Regular Session 2016
Title: Small Business Act, tax credits for small business employers authorized under certain conditions, Sec. 40-18-321 am'd.
Summary: HB36 creates the Alabama Small Business Jobs Act, offering tax credits to small Alabama employers for hiring new, qualified, full-time employees, with rules about net growth and veteran credits.
What This Bill Does
Defines small business employers as those with 75 or fewer employees. Provides a one-time $1,500 tax credit for each qualified new employee after they complete 12 months of full-time employment. Requires the employer to show net employee growth to claim credits and prohibits double-dipping with the Full Employment Act for the same employee; credits are nonrefundable, can be carried forward up to 3 years, and can offset certain state taxes. Adds a separate $1,000 credit for recently deployed unemployed veterans if they meet criteria. The Department of Revenue must promote these credits, and the act becomes effective 90 days after passage with tax-year applicability beginning in 2016 or later.

Who It Affects
Alabama small business employers (75 or fewer employees) who create new jobs and hire qualified new employees, potentially reducing their state tax liability by $1,500 per eligible hire.
Newly hired employees who are Alabama residents, work full-time, earn at least $40,000, and did not work for the same employer in the prior 12 months, enabling their employer to claim the tax credit.

Key Provisions
Tax credit of $1,500 per qualified new employee, one-time, available in the tax year after the employee completes 12 months of consecutive full-time employment.
Alabama small business employer defined as an organization in Alabama with 75 or fewer employees during the tax year.
Net employee growth requirement: the year’s net growth must be at least the number of qualified new employees claimed, plus those claimed in prior years.
Credit can offset certain state taxes (income taxes), not refundable, not transferable, and may be carried forward up to 3 years; must not reduce tax liability below zero; financial institution credits must maintain municipality distributions.
No double credit for the same employee: a business may not claim both this act and the Full Employment Act of 2011 for the same employee.
Section 5 adds a $1,000 credit for recently deployed unemployed veterans who meet specific residency, discharge, and Department of Labor unemployment criteria, in addition to the base credits.
Department of Revenue must create and implement a program by December 31, 2016 to promote these credits and related small business tax incentives.
Effective date: credits apply for tax years beginning on or after January 1, 2016; act becomes law 90 days after passage.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Business and Commerce