HB408 Alabama 2020 Session

Summary

Primary Sponsor

John W. Rogers

Democrat

Session

Regular Session 2020

Title

Production companies, rebates for production expenditures which equal or exceed at least $500,000 from date or production approval, Sec. 41-7A-43 am'd.

Summary

HB408 changes Alabama's film production tax rebates by setting a $500,000 expenditure threshold within 12 months to qualify, allowing aggregated budgets for state-certified productions, and outlining rebate formulas, caps, and tax-credit mechanics.

What This Bill Does

The bill specifies that a qualified production can receive a rebate if its state-certified expenditures total at least $500,000 within 12 months of certification. It allows state-certified productions to combine multiple productions' budgets to surpass the threshold, as long as none of the individual productions reaches $500,000 on its own. Rebates are calculated as 25% of expenditures excluding Alabama resident payroll plus 35% of payroll paid to Alabama residents, with rebates capped after the first $20,000,000 of expenditures in Alabama. The rebate can offset the producer's Alabama income tax for the year the production activity concludes, and any excess is refunded. Rules to administer these rebates will be issued by the relevant tax authorities.

Who It Affects

• Qualified production companies that spend at least $500,000 on a state-certified project within 12 months of certification (or via aggregated budgets across multiple productions).
• State-certified productions and their workers, particularly Alabama residents whose payroll affects the rebate calculation, as well as non-resident expenditures.
• The Alabama Department of Revenue and related offices, which will issue rules to administer the program.

Key Provisions

• Threshold and aggregation: A state-certified project must have at least $500,000 in expenditures within 12 months of certification; budgets may be aggregated across multiple productions to reach the threshold, provided no single aggregated project meets the threshold on its own.
• Rebate calculation and cap: Rebates equal 25% of expenditures excluding Alabama resident payroll plus 35% of Alabama resident payroll, with eligibility limited to the first $20,000,000 of expenditures in Alabama for a state-certified production.
• Special project rules: A single TV episode or miniseries, or a series of commercials, may be treated as a single production for counting expenditures if episodes or commercials meet the definition and pertain to the same subject; there are also specific minimums and caps for soundtrack ($50,000 min, $300,000 cap) and music videos ($50,000 min, $200,000 cap).
• Tax credit mechanics: Rebates can be used to offset the qualified production company's Alabama income tax liability for the year the production activity concludes; any rebate exceeding tax liability is refunded.
• Administration and effective date: The Department of Revenue and the applicable office will create rules to administer the rebates; the act becomes effective on the date specified (first day of the third month after passage).

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