HB331 Alabama 2020 Session

Summary

Primary Sponsor

Craig LipscombRepresentative

Republican

Session

Regular Session 2020

Title

Taxation; income tax exemption for automobile tire manufacturers under certain conditions.

Summary

HB331 would create a state income tax credit for Alabama tire manufacturers that originally manufacture tires in Alabama, with transferability and a sunset through 2026.

What This Bill Does

If enacted, the bill would authorize a tax credit against Alabama's state income tax for automobile tire manufacturers that produce tires in Alabama. The credit would be $1 for each originally manufactured tire in the tax year, limited by a pro-rata cap so total credits do not exceed $5 million per year, and it would run through 2026 unless extended. The credit is nonrefundable, but credits may be transferred to other taxpayers under specific rules, including minimum value, transfer fees, and required transfer certificates. Taxpayers must certify the number of tires manufactured for the year.

Who It Affects

• Automobile tire manufacturers that manufacture tires in Alabama would be eligible for a credit against their Alabama state income tax, reducing their tax liability subject to the annual cap and production verification.
• Other taxpayers who receive transferred credits (including owners or members of pass-through entities) would be able to use the credits to offset their Alabama income tax, under specified transfer procedures and fees.

Key Provisions

• Establishes the Automobile Tire Manufacturer Tax Credit Act of 2020 and defines terms: automobile tire, automobile tire manufacturer (NAICS Code 326211), and originally manufactured.
• For tax years starting 2021, provides a tax credit against the state income tax equal to $1 per originally manufactured tire, with pro-rata limitations to keep within the annual $5,000,000 cap.
• Credits are nonrefundable; pass-through entities can have credits passed through pro rata or per agreement to partners, members, or owners.
• Credits may be transferred; transfers must meet minimum value of 85% of the credit, include transfer forms and agreements, and incur a $1,000 transfer fee per transferee; transferees receive a tax credit certificate to use against income tax.
• Recapture provisions apply against the taxpayer who utilizes the credit.
• The Department of Revenue monitors the $5 million annual cap, issues credits, and notifies taxpayers when the cap is reached.
• Taxpayers electing to use the credit must certify the number of tires manufactured in the tax year.
• The credit is available through the 2026 tax year unless extended by later legislation.
• Effective date: the act takes effect on the first day of the third month after passage and approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation