HB85 Alabama 2021 Session

Summary

Primary Sponsor

David Wheeler

Republican

Co-Sponsors

Jim CarnsChris EnglandLynn Greer

Session

Regular Session 2021

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

HB85 would broaden Alabama's premium tax credits for insurers by expanding who qualifies as an affiliate (to include licensed producers) and by widening the Alabama Insurance Offices Facilities Credit for additional activities.

What This Bill Does

It expands the Alabama Insurance Offices Facilities Credit to cover more activities and includes licensed producers as affiliates. It allows premiums, office facilities, and Alabama real property investment credits to be calculated by aggregating amounts across an insurer and its affiliates, with credits allocated among the insurer and its affiliates. It maintains the credit structures, including the office facilities credit with four employee-based tiers and a 1% premium cap, and the real property investment credit at 0.10% per $1 million invested with a 1% cap, plus related rules on cost, debt, and property allocation. It becomes effective for tax years beginning after December 31, 2021.

Who It Affects

• Alabama-licensed insurers and their affiliates (including licensed producers appointed by the insurer), who would be eligible for expanded credits and may be able to aggregate credits across related entities.
• State budgetary funds (General Fund, Education Trust Fund, and Alabama Special Mental Health Trust Fund) that rely on premium tax receipts, which could be affected by the larger credits reducing tax liability.

Key Provisions

• Expands the Alabama Insurance Offices Facilities Credit and broadens the definition of affiliate to include licensed producers appointed by an insurer and other affiliated entities under common control.
• Allows aggregation of premiums, office facilities, and Alabama real property investments across an insurer and its affiliates for credit calculations, with credits allocated among insurers and affiliates at the insurer's discretion and on a per-insurer basis.
• Office facilities credit uses a tiered percentage based on the number of full-time employees or licensed producers in an office: 1-3 (0.25%), 4-10 (0.50%), 11-50 (0.75%), 51+ (1.00%), with a total cap of 1% of Alabama premiums.
• Alabama real property investment credit is 0.10% of premiums for each $1,000,000 of qualifying Alabama real property investments, with a total cap of 1% of premiums and detailed rules on how property value, cost basis, and debt influence the calculation and allocation.
• Special rules define affiliate scope and aggregation mechanics, and specify how credits are allocated and reported among the insurer and its affiliates; the act becomes effective for taxable years beginning after December 31, 2021.

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