Senate Bill 125 Alabama 2026 Session

Summary

Primary Sponsor

David SessionsSenator

Republican

Session

2026 Regular Session

Title

Taxation; to establish an income tax credit for oyster shell recycling

Summary

SB125 would establish an income tax credit for Alabama restaurants that recycle oyster shells.

What This Bill Does

It creates a state income tax credit for restaurants that donate oyster shells to approved oyster shell recycling programs. The credit equals the lesser of $1 per 50 pounds donated or $2,000 per tax year, with a $100,000 annual cap on total credits. Credits are awarded on a first-come, first-served basis, and any unawarded credits can receive priority in the next year; if the credit exceeds the tax due, the excess is refunded as an overpayment. The Department of Revenue would implement rules and designate approved programs, with credits available from 2026 through 2030, effective June 1, 2026.

Who It Affects

• Restaurants that donate oyster shells to approved recycling programs would be able to claim a tax credit against their Alabama income tax.
• Corporations, individuals, and other entities that file Alabama income tax returns (including pass-through entities and their partners/members) could claim their share of the credit on their tax returns.

Key Provisions

• Establishes an income tax credit for restaurants that participate in approved oyster shell recycling programs.
• Credit amount: the lesser of $1 per 50 pounds of shells donated or $2,000 per tax year; cap of $100,000 in credits per calendar year.
• First-come, first-served basis for credits; any unissued credits due to the cap receive priority in the next tax year.
• Excess credit beyond tax liability is treated as an overpayment and refundable; no transfer or sale of credits allowed.
• Taxpayers must maintain records to verify eligibility and amounts claimed; records may be requested by the Department.
• Credit may be claimed by corporations, individuals, and other entities; pass-through allocations to partners/members follow specific rules.
• Department of Revenue to adopt implementing rules and coordinate with the Commissioner of Conservation and Natural Resources; may designate oyster shell recycling programs.
• Credits may be claimed starting with the 2026 tax year and may not be claimed after the 2030 tax year; effective date June 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue