HB331 Alabama 2020 Session

This bill would allow a tax credit against the state income tax for automobile tire manufacturers that manufacture automobile tires in the state of Alabama

Relating to tax credits; to allow a tax credit to automobile tire manufacturers that manufacture automobile tires in the state of Alabama.

Section 1

This act shall be known and may be cited as the “Automobile Tire Manufacturer Tax Credit Act of 2020”.

Section 2

The following terms shall have the following meanings for the purposes of this act: (1) AUTOMOBILE TIRE. Rubber that fits around the wheel of a four-wheeled self-propelled vehicle designed for passenger transportation. (2) AUTOMOBILE TIRE MANUFACTURER. Any business described by 2017 North American Industry Classification System (NAICS) Code 326211. (3) ORIGINALLY MANUFACTURED. An automobile tire that was manufactured in the state of Alabama and was not the result of a retread of an existing tire.

Section 3

(a) For tax years beginning on or after January 1, 2021, any Automobile Tire Manufacturer shall be allowed a tax credit against the tax imposed by Section 40-18-2, Code of Alabama 1975, equal to one dollar ($1) per automobile tire originally manufactured during the tax year or as may be limited on a pro-rata basis by the Department of Revenue to ensure the total credits awarded do not exceed the cumulative credit limitations provided by this act. (b) Where the taxes owed by the taxpayer are less than the credit, the taxpayer may not be entitled to claim a refund for the difference. Tax credits granted to a partnership, limited liability company, S Corporation, trust, or estate shall be passed through to the partners, members, and owners respectively pro rata or pursuant to an executed agreement among the partners, members, or owner documenting an alternate distribution method without regard to their sharing of other tax or economic attributes of the entity. (c) Any tax credits transferred shall be at a value of at least eighty-five percent (85%) of the present value of the credits. However, once a credit is transferred, only the transferee may utilize such credit and the credit cannot be transferred again. A transferee of the tax credits may use the amount of tax credits transferred to offset any income tax under Chapter 18 of Title 40. The Department shall promulgate a form transfer statement to be filed by the transferor with the Department prior to the purported transfer of any credit issued under this chapter. The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be transferred to each transferee listed on the form. The transfer statement form shall also contain such other information as the Department may from time to time reasonably require. For each transfer, the transferor shall file (1) a completed transfer statement form; (2) a copy of the proposed written transfer agreement; and (3) a transfer fee payable to the Department in the amount of one thousand dollars ($1,000) per transferee listed on the transfer statement form. The transferor shall file with the Department a fully executed copy of the written transfer agreement with each transferee within 30 days after the completed transfer. Filing of the written transfer agreement with the Department shall perfect such transfer with respect to such transferee. Within 30 days after the Department's receipt of the fully executed written transfer agreement, the Department shall issue a tax credit certificate to each transferee listed in such agreement in the amount of the tax credit so transferred. Such certificate shall be used by the transferee in claiming the tax credit pursuant to this act. The Department may promulgate such additional rules as are necessary to permit verification of the ownership of the tax credits but shall not promulgate any rules which unduly restrict or hinder the transfer of the tax credits. Recapture of any of the credit shall apply against the taxpayer who utilizes the credit pursuant to the provisions of §50 IRC. (d) The cumulative amount of tax credits issued pursuant to this act shall not exceed five million dollars ($5,000,000) annually. The Department of Revenue shall ensure that this cap is not exceeded, shall prescribe the various methods by which these credits are to be issued, shall reserve these tax credits in a manner prescribed by the Department, and shall develop procedures to notify taxpayers at such points in time when the tax credit caps in this subsection have been reached for the applicable tax credit year. (e) Any taxpayer who elects to use the tax credits provided by this act shall certify to the Department of Revenue the number of automobile tires manufactured during the tax year. (f) The tax credit allowed under this act shall continue through the 2026 tax year, unless extended by an act of the Legislature.

Section 4

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.