SB303 Alabama 2022 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Co-Sponsor

Tim Melson

Session

Regular Session 2022

Title

Economic tax incentives, reporting requirements of state agencies, Sec. 40-1-50 am'd.

Summary

SB303 would tighten oversight of economic tax incentives by changing reporting requirements, setting sunset dates for many incentives, and requiring new rules for future incentives.

What This Bill Does

It requires state agencies that administer economic tax incentives to annually report to the Legislature using a format set by the Department of Revenue, and it aligns committee schedules to review these reports. It establishes sunset dates for several existing incentive programs, with a repeal by December 31, 2027 unless extended for up to five additional years. It also imposes new rules for all future economic tax incentive legislation, including performance statements of purpose, a five-year expiration, annual credit limits, carryforward limits of five years, a limit on transfers or sales to one transaction, and pre-certification requirements; and starting in 2023, taxpayers must report the amount of new tax credits claimed. Additionally, the bill requires joint hearings every odd-numbered year to review the tax expenditure reports and make recommendations.

Who It Affects

• State agencies that administer economic tax incentives must collect data, prepare reports, and participate in required schedules and hearings.
• Businesses and individuals who receive incentives or rely on them may see sunset or expiration of certain programs by 2027 unless extended, and new incentives will face stricter rules and reporting requirements, including pre-certification and annual limits.

Key Provisions

• Define economic tax incentives to include credits, deductions, exemptions, abatements, preferential rates, or rebates tied to economic development.
• Require annual reporting by each agency that administers an economic tax incentive to the Legislature, with a Department of Revenue–provided format and schedule every four years.
• Schedule and conduct joint hearings every odd-numbered year on the tax expenditure reports, with recommendations to modify, discontinue, or take no action on each incentive.
• Establish sunset dates for Brownfield Development Tax Abatement Act, Rural Physician Tax Credit, Coal Production Tax Credit, Reemployment Act of 2010, Full Employment Act of 2011, Veterans Employment Act, Irrigation Equipment Tax Credit, Entertainment Industry Incentive Act of 2009, and Alabama Enterprise Zone Act, all repealing December 31, 2027 unless extended for up to five years.
• Note that repeals affect only future availability after 12/31/2027; credits awarded before that date are not reduced or suspended.
• Require new economic incentive legislation (from 2023 onward) to include: a tax credit performance statement describing purpose; a five-year expiration after the credit’s effective date; an annual credit/incentive cap; a five-year carryforward limit; a one-transfer/sale transaction limit after filing and a fee; and pre-certification by the Department of Revenue before credits can be claimed.
• Require taxpayers claiming new credits to report the amount claimed to the Department of Revenue starting with the 2023 tax year.
• Department of Revenue to develop report formats and provide tax information needed to complete the reports, and to prepare a four-year schedule of incentives for reporting.
• Effective date: the act becomes law on the first day of the third month after passage/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