HB 260

Session
Regular Session 2018
Title
Irrigation equip. or reservoirs for agriculture purposes, income tax credit, eligibility for credit, Sec. 40-18-342 am'd.
Description

Under existing law, an income tax credit is available for any agricultural trade or business that purchases and installs qualified irrigation equipment or a qualified reservoir. The maximum amount of the credit is $10,000 for tax years 2011 through 2017 and $50,000 for tax years 2018 through 2022

This bill would specify that an eligible taxpayer may claim one credit during tax years 2011 through 2017 and one credit during tax years 2018 through 2022

Relating to the income tax irrigation credit; to amend Section 40-18-342 of the Code of Alabama 1975, as amended by Act 2017-352 of the 2017 Regular Session, to specify that eligible taxpayers may claim one credit during tax years 2011 through 2017 and one credit during tax years 2018 through 2022.

Subjects
Taxation
View Original PDF: HB 260 - Introduced - PDF

Under existing law, an income tax credit is available for any agricultural trade or business that purchases and installs qualified irrigation equipment or a qualified reservoir. The maximum amount of the credit is $10,000 for tax years 2011 through 2017 and $50,000 for tax years 2018 through 2022

This bill would specify that an eligible taxpayer may claim one credit during tax years 2011 through 2017 and one credit during tax years 2018 through 2022

Relating to the income tax irrigation credit; to amend Section 40-18-342 of the Code of Alabama 1975, as amended by Act 2017-352 of the 2017 Regular Session, to specify that eligible taxpayers may claim one credit during tax years 2011 through 2017 and one credit during tax years 2018 through 2022.

Section 1

Section 40-18-342, Code of Alabama 1975, as amended by Act 2017-352 of the 2017 Regular Session, is amended to read as follows:

§40-18-342.

(a)(1) Subject to subdivision (2), for For all tax years beginning after December 31, 2011, until tax year ending December 31, 2017, there shall be allowed to any agricultural trade or business an income tax credit of equal to 20% of the cost of the purchase and installation of any qualified irrigation equipment and any conversion costs related to the conversion of irrigation equipment from fuel to electricity or qualified reservoirs. For a surface water withdrawal irrigation system to be eligible for credit, the irrigation system must operate utilizing a qualified reservoir, except when the surface water withdrawal is directly from any river or stream whose average annual flow exceeds 8,000 cubic feet per second. A qualified reservoir is not required for a ground water withdrawal irrigation system. The credit shall be equal to 20% of the accrued cost of the qualified irrigation equipment and the cost of constructing the qualified reservoir, but shall not exceed $10,000 and shall not exceed the taxpayer's Alabama income tax liability computed without regard to the credit. The credit shall be taken in the year in which the qualified irrigation equipment or the qualified reservoir is placed in service.

(2) The credit provided in this subsection shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.

(b)(1) Subject to subdivision (2), for For all tax years beginning after December 31, 2017, until tax year ending December 31, 2022, unless extended by an act of the Legislature, there shall be allowed to any agricultural trade or business an income tax credit equal to 20 percent of the cost of the purchase and installation of any qualified irrigation equipment and any conversion costs related to the conversion of irrigation equipment from fuel to electricity or qualified reservoirs. For a surface water withdrawal irrigation system to be eligible for credit, the irrigation system must operate utilizing a qualified reservoir, except when the surface water withdrawal is directly from any river or stream whose average annual flow exceeds 8,000 cubic feet per second. A qualified reservoir is not required for a ground water withdrawal irrigation system. The credit shall be equal to a percent of the accrued cost of the qualified irrigation equipment and the cost of constructing the qualified reservoir, as follows: Twenty percent of the accrued cost not to exceed ten thousand dollars ($10,000) or 10 percent of the accrued cost not to exceed fifty thousand dollars ($50,000), whichever is greater. The credit shall not exceed the taxpayer's Alabama income tax liability computed without regard to the credit. The credit shall be taken in the year in which the qualified irrigation equipment or the qualified reservoir is placed in service.

(2) The credit provided in this subsection shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.

(c)(1) Subject to subdivision (2), for For all tax years beginning after December 31, 2022, there shall be allowed to any agricultural trade or business an income tax credit equal to 20 percent of the cost of the purchase and installation of any qualified irrigation equipment and any conversion costs related to the conversion of irrigation equipment from fuel to electricity or qualified reservoirs. For a surface water withdrawal irrigation system to be eligible for credit, the irrigation system must operate utilizing a qualified reservoir, except when the surface water withdrawal is directly from any river or stream whose average annual flow exceeds 8,000 cubic feet per second. A qualified reservoir is not required for a ground water withdrawal irrigation system. The credit shall be equal to 20 percent of the accrued cost of the qualified irrigation equipment and the cost of constructing the qualified reservoir, but shall not exceed $10,000 and shall not exceed the taxpayer's Alabama income tax liability computed without regard to the credit. The credit shall be taken in the year in which the qualified irrigation equipment or the qualified reservoir is placed in service.

(2) The credit provided in this subsection shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.

(d) The credit provided in this article shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.

(e)(d) The credit may be carried to each of the five years following the taxable year the qualified irrigation system or reservoir is placed in service. The portion of the credit which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of credit over the sum of the income tax due for each of the prior taxable years to which the credit may be carried.

(f)(e) The Legislature recognizes that a substantial number of businesses are organized as limited liability companies, partnerships, and other types of business entities and that certain business entities, organized as corporations elect to be treated as "S" corporations under federal and state tax laws, and that it is essential that the irrigation credit amount shall be available on a pass-through basis. The shareholders, partners, members, owners, or beneficiaries of any of the aforementioned businesses claiming the credit allowed in this section shall be allowed their pro rata share of the credit against their income tax levied.

(g)(f)(1) Effective for tax years beginning after December 31, 2017, the The agricultural trade or business receiving tax credits pursuant to this chapter section shall file an annual informational report in a manner as prescribed by the Department of Agriculture and Industries prior to claiming the credits on a tax return. All information submitted to the Department of Agriculture and Industries by taxpayers claiming or seeking certification of a credit shall be subject to the confidentiality provisions of Section 40-2A-10.

(2) The information on the reports required by this subsection shall be consistent with the information required by the Legislature pursuant to Section 40-1-50, and rules adopted thereunder. Information Aggregated information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10, and shall be provided by the Department of Agriculture and Industries to the Legislature in accordance with Section 40-1-50 and rules adopted by the Department of Revenue."

Section 2

All laws or parts of laws which conflict with this act are repealed.

Section 3

This act shall become effective for tax years beginning on or after December 31, 2018, following its passage and approval by the Governor, or upon its otherwise becoming law.

No articles found.
Action Date Chamber Action
March 22, 2018HForwarded to Governor on March 22, 2018 at 2:22 p.m. on March 22, 2018.
March 22, 2018HAssigned Act No. 2018-468.
March 22, 2018HClerk of the House Certification
March 22, 2018HEnrolled
March 22, 2018SSignature Requested
March 22, 2018HPassed Second House
March 22, 2018SMotion to Read a Third Time and Pass adopted Roll Call 1036
March 22, 2018SThird Reading Passed
March 1, 2018SRead for the second time and placed on the calendar
February 20, 2018SRead for the first time and referred to the Senate committee on Finance and Taxation Education
February 15, 2018HCosponsors Added
February 15, 2018HMotion to Read a Third Time and Pass adopted Roll Call 355
February 15, 2018HThird Reading Passed
January 25, 2018HRereferred HB260 from W&ME to A&F
February 8, 2018HRead for the second time and placed on the calendar
January 18, 2018HRead for the first time and referred to the House of Representatives committee on Ways and Means Education
2018-03-22
Chamber: Senate
Result: Passed
2018-02-15
Chamber: House
Result: Passed
2018-02-15
Chamber: House
Result: Passed