HB163 Alabama 2025 Session

Summary

Primary Sponsor

David Faulkner Representative

Republican

Session

2025 Regular Session

Title

Decoupling the Tax Cuts and Jobs Act (TJCA) Amendment to Section 174 of the Internal Revenue Code

Description

Under the current provisions of the Code of Alabama 1975, taxable income for corporate income is defined as federal taxable income with certain additions and deductions. Alabama's corporate income tax law automatically conforms to federal corporate income tax laws, including changes imposed by the federal Tax Cuts and Jobs Act (TJCA).

Under 26 U.S.C § 174, as amended by the TJCA, firms that invest in research and experimental expenditures must amortize their costs over five years for domestic expenses or fifteen years for foreign expenses, beginning in 2022 and after.

This bill would decouple Alabama from the TCJA amendment to 26 U.S.C. § 174, relating to the amortization of research and experimental expenditures, and allow research and experiments to be treated in the same manner as provided in 26 U.S.C. § 174 prior to tax year 2022.

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Subjects

Taxation & Revenue