HB435 Alabama 2020 Session

Summary

Primary Sponsor

David Wheeler

Republican

Session

Regular Session 2020

Title

Insurance premium tax credits, to expand the Alabama Insurance Offices Facilities Credit for certain activities, to expand who can be an affiliate, Sec. 27-4A-3 am'd.

Summary

The bill expands premium tax credits for Alabama insurance offices by including licensed producers as affiliates and broadening the activities that qualify for the Alabama Insurance Offices Facilities Credit.

What This Bill Does

It amends the affiliate definition to include licensed producers appointed by an insurer, enabling them to count toward credits. It expands the Alabama Insurance Offices Facilities Credit eligibility, with credits based on office staffing and capped at 1% of Alabama premiums taxed. It preserves the existing Real Property Investment Credit and the framework for aggregating credits across insurers and their affiliates, including how credits are allocated and reported. It becomes effective for tax years beginning after December 31, 2020.

Who It Affects

• Insurers licensed to do business in Alabama: could claim larger premium tax credits for Alabama offices and real property investments due to the broadened affiliate definition and expanded office facilities credit.
• Licensed producers (insurance agents) appointed by insurers: would be considered affiliates for credit purposes, potentially increasing eligibility for credits and allowing credit aggregation.

Key Provisions

• Amends Section 27-4A-3 to expand the definition of 'affiliate' to include licensed producers appointed by the insurer.
• Expands the Alabama Insurance Offices Facilities Credit to cover credits for offices used by licensed producers or owned/leased by insurers in Alabama for insurance operations, with credit calculated from the number of full-time employees or licensed producers and their staff, and with a total cap of 1% of premiums taxed under the appropriate rate.
• Maintains the Alabama Real Property Investment Credit at 0.10% of premiums for each $1,000,000 in Alabama real property investments, with a total cap of 1% of premiums taxed, and outlines eligible real property investments and cost-based qualifications.
• Allows aggregation of credits across an insurer and its affiliates (including affiliates that are licensed producers), as if all were one insurer, with credits allocated among insurers and affiliates per insurer, subject to specific credit limits and required forms filed with the Department of Insurance.
• Preserves the quarterly premium tax payment framework and related deductions/credits, including allocations for ad valorem taxes, examination expenses, and other authorized credits, and sets the effective date for tax years beginning after December 31, 2020.

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

Subjects

Insurance Premium Tax