SB90 Alabama 2016 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2016

Title

Taxation, tax credit for employers employing apprentices, Apprenticeship Tax Credit Act

Summary

SB90 creates a nonrefundable Alabama income tax credit for employers who hire apprentices, with an annual cap, defined eligibility, and required program reporting.

What This Bill Does

It establishes an income tax credit of up to $1,000 for each eligible apprentice employed at least seven full months in the prior year, with a maximum of five apprentices per employer and a scale tied to the employer’s investment in the apprentice. The total credits are capped at $3,000,000 per year, and the Department of Revenue administers the credits and notifies taxpayers when the cap is reached. The credit is applied against certain Alabama income taxes, is nonrefundable, nontransferable, and can be allocated pro rata to owners of pass‑through entities; employers must apply annually for the preceding calendar year. The Workforce Development Division must report annually on the program’s effectiveness, and the act allows rulemaking and defines key terms; the program takes effect for the 2017 through 2021 tax years unless extended.

Who It Affects

• Eligible employers that hire apprentices (up to five per employer) will be able to claim the tax credit against their Alabama income tax, subject to annual cap and eligibility rules.
• Apprentices and their apprenticeship programs/sponsors registered with the U.S. Department of Labor, meeting the defined requirements, are connected to the credit and must comply with program standards to qualify.

Key Provisions

• Creates a nonrefundable Alabama income tax credit for eligible employers that employ an apprentice for at least seven full months in the prior year, up to $1,000 per apprentice, with a per-employer limit of five apprentices and a scaling system based on the employer’s investment in the apprentice.
• Credit is allowed against Alabama income taxes (Chapters 16 or 18, Title 40), is not refundable or transferable, and may be claimed by owners of certain pass‑through entities on a pro rata basis; employers must apply each year for the prior year.
• Annual cap on total credits issued is $3,000,000; Department of Revenue administers the cap and must notify taxpayers when the cap is reached.
• Defines key terms: Apprentice, Apprenticeship Agreement, Eligible Employer, and references to registration with the Office of Apprenticeship of the U.S. DOL; sets eligibility and program participation standards.
• Workforce Development Division may adopt rules to implement the act and must coordinate with the Department of Revenue; it must provide an annual report to specified legislative committees on program effectiveness.
• Effective for the 2017 tax year through the 2021 tax year, unless extended; act becomes effective immediately after passage and approval.

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