Senate Bill 253 Alabama 2026 Session

Summary

Primary Sponsor

Merika ColemanSenator

Democrat

Session

2026 Regular Session

Title

Entertainment Industry Incentive Act of 2009 amended, create additional incentive program, extend review and evaluation deadline

Summary

SB253 would add a new small-budget payroll rebate, extend the incentive evaluation deadline, clarify loan-out compensation for rebates, expand production tax exemptions, and set a repeal timeline for the current incentives unless extended.

What This Bill Does

It creates a new small-budget incentive under the Alabama Entertainment Office that provides 45% of payroll paid to Alabama residents for state‑certified productions with total expenditures between $100,000 and $499,999, with up to $2 million reserved each year for these projects. It extends the deadline for the Department of Commerce to contract with an out-of-state evaluator to review incentives and report findings to the Legislature by the first day of the 2028 Regular Session. It clarifies how compensation paid to loan-out companies is counted toward rebates, requiring certain Alabama tax withholdings to be made and treated as Alabama payroll for rebate calculations. It expands and clarifies sales, use, and lodging tax exemptions for qualified productions, including application thresholds, reporting requirements, and per‑year caps, while maintaining overall incentive caps and a repeal timeline.

Who It Affects

• Qualified production companies (including small-budget producers) and their Alabama resident employees, who would be eligible for the new 45% payroll rebate on state-certified productions with expenditures of $100,000–$499,999, subject to annual caps and reporting.
• Alabama residents, loan-out companies, and other participants in productions, who would see the payroll counting rules and tax exemption processes clarified and who may benefit from or be affected by the revised tax exemptions and reporting requirements.

Key Provisions

• Creates a new small-budget incentive: 45% of payroll paid to Alabama residents for state-certified productions with expenditures between $100,000 and $499,999, with up to $2,000,000 reserved annually for these projects (limits apply if expenditures exceed $499,999).
• Maintains the existing base rebate structure for larger productions: 25% of production expenditures plus 35% of Alabama-resident payroll, with a minimum of $500,000 in expenditures and a per-project cap (and a total cap of $20,000,000 of expenditures for 2015–2025, rising to $22,000,000 for 2026+).
• Adds category-specific rebates for music-related productions (soundtracks, music videos, music albums) with separate expenditure thresholds and caps; these categories have their own limits on eligible spend and timing for rebates.
• Clarifies the treatment of loan-out compensation in rebate calculations, allowing such payments to count toward the rebate if appropriate Alabama tax withholdings are made (either withholding tax at the highest rate or income tax at the highest rate, depending on entity type).
• Explicitly provides for aggregation rules for TV series or miniseries, allowing multiple episodes produced within a 12-month period to be combined to meet monetary thresholds if the episodes share the same subject.
• Extends sales, use, and lodging tax exemptions for qualified productions, including application requirements (minimum anticipated expenditures, designation of a representative, and department approval), and post-project reporting with tax exposure if thresholds aren’t met within 12 months.
• Caps, carryover, and special reserves: annual incentive caps of $20,000,000 (2015–2025) and $22,000,000 (2026+), with $2,000,000 reserved for music albums and a carryover mechanism up to $3,000,000; unspent incentives may roll over to the next year.
• Evaluation and reporting: the Department of Commerce must contract with an out-of-state entity to review the program and report findings to the Legislature by the 1st legislative day of the 2028 Regular Session.
• Repeal of the Entertainment Industry Incentive Act of 2009 is scheduled for December 31, 2028 unless extended; credits awarded before that date are not affected, and the department must report annually on incentives beginning in 2023.

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

Subjects

Economic Development