Title 40 — Title 40

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. This article may be cited as the Full Employment Act of 2011. History: (Act 2011-551, p. 1017, §1.)

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. For purposes of this article, a small business is defined as a business that employs 50 or fewer employees on the effective date of this act. History: (Act 2011-551, p. 1017, §2.)

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. The Legislature finds and determines, in accordance with its goal, shared by Governor Robert Bentley, of achieving statistical full employment for Alabama’s citizens, that the Legis…

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. (a) An Alabama income and financial institution excise tax credit is hereby established for small businesses that create new jobs paying more than ten dollars ($10) per hour. The cr…

Legislature) Repeal of Incentives. (a) The Full Employment Act of 2011, Article 11, commencing with Section 40-18-290, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additiona…

The salaries, fees, commissions, or other income of officers or agents of the United States or its agencies and instrumentalities or its contractees, received from the United States or from its agencies and instrumentalities, shall be subject to income taxes levied by the State o…

(a) Taxpayer filing separate returns. If a taxpayer, with the approval of the Department of Revenue, changes the basis of computing taxable income from the fiscal year to the calendar year, a separate return shall be filed for the period between the close of the last fiscal year …

(a) A corporation subject to the tax imposed by Section 40-18-2 shall pay a tax equal to six and one-half percent of the taxable income of the corporation, as defined in this chapter. (b) If the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, the ta…

Business or Nonbusiness Income. Repealed by Act 99-664, effective Dec. 31, 2000. History: (Acts 1995, No. 95-591, p. 1251, §1.)

(a)(1) Individuals who are residents or domiciliaries of this state and business entities that are organized or commercially domiciled in this state have substantial nexus with this state. (2) Nonresident individuals and business entities organized outside of the state that are d…

AMENDED BY ACT 2026-100, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE. As used in this article, the following terms shall have the following meanings: (1) CATASTROPHE SAVINGS ACCOUNT. A regular savings account or money market account established by an insurance policyh…

2026-100) [Effective until October 1, 2026.] AMENDED BY ACT 2026-100, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) An individual taxpayer is allowed a deduction against income earned for state income tax purposes imposed pursuant to Section 40-18-5, for amounts co…

[Effective until October 1, 2026.] AMENDED BY ACT 2026-100, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) A distribution from a catastrophe savings account must be included in the income of the taxpayer unless the amount of the distribution is used to cover qualifi…

The Department of Revenue may promulgate rules necessary to implement and administer this article. History: (Act 2012-413, p. 1123, §4.)

With the exception of unrelated business taxable income determined in accordance with 26 U.S.C. § 512, the tax imposed by Section 40-18-31 shall not apply to the organizations referred to in 26 U.S.C. § 501(a), and the following entities: (1) Farmers and other mutual hail, cyclon…

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. This article shall be known and may be cited as the Veterans Employment Act. History: (Act 2012-168, p. 254, §1; Act 2018-194, §1.)

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. As used in this article, the following terms have the following meanings: (1) COMBAT VETERAN. A member of the Armed Forces of the United States who served in a United States Departm…

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. In addition to the tax credit allowed for in the Full Employment Act of 2011 or the Alabama Small Business and Agribusiness Jobs Act, an additional one thousand dollar ($1,000) tax …

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. For all tax years beginning on or after January 1, 2018, a qualified employer subject to the requirements of this article and Sections 40-18-290 through 40-18-293 shall be eligible …

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. (a) In addition to the definition in Section 40-18-321, EXPENSE ASSOCIATED WITH A START-UP BUSINESS is defined as any of the following: (1) Expenses associated with the development …

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. (a) The Department of Labor, in coordination with the Department of Revenue, the Department of Economic and Community Affairs, and the Department of Veterans’ Affairs shall: (1) Pro…

Legislature) Repeal of Incentives. (a) The Veterans Employment Act, Article 13, commencing with Section 40-18-320, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional ye…

In the case of a corporation subject to the tax imposed by Section 40-18-31, the term “taxable income” means federal taxable income without the benefit of federal net operating losses plus the additions prescribed and less the deductions and adjustments allowed by this chapter an…

The following items shall be added to federal taxable income for purposes of computing taxable income under this chapter: (a) State and local income taxes that are deductible in computing federal taxable income. (b) Interest on obligations of state or local governments other than…

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. As used in this article, the following terms shall have the following meanings: (1) AGRICULTURAL TRADE OR BUSINESS. Any trade or business described in the 2007 North American Indust…

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. Notwithstanding any other provision of law to the contrary, for all tax years beginning after December 31, 2011, any agricultural trade or business may elect to expense qualified ir…

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. (a)(1) Subject to subdivision (2), for all tax years beginning after December 31, 2011, until tax year ending December 31, 2017, there shall be allowed to any agricultural trade or …

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. Nothing in this article changes the applicability of existing environmental and water laws and regulations in the State of Alabama including the Alabama Water Use Reporting Program …

REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE. The Department of Revenue shall promulgate rules and regulations for the implementation of the credit authorized in this article and shall coordinate with the Alabama State Soil and…

Legislature) Repeal of Incentives. (a) The Irrigation Equipment Tax Credit, Article 14, commencing with Section 40-18-340, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five addit…

(a) The following items shall be deducted from federal taxable income for purposes of computing taxable income under this chapter: (1) Refunds of state and local income taxes. (2) Federal income tax paid or accrued during the taxpayer’s taxable year. The portion of federal income…

In computing the taxable income of corporations subject to income tax as outlined in Section 40-18-35, there shall be allowed, in addition to the deductions specified therein, a deduction for the sum of the net operating losses which may be carried forward to the taxable year for…

Etc. All amounts included in income under 26 U.S.C. § 951A shall be deducted from federal taxable income for purposes of computing taxable income under this chapter. However, any amount subtracted under this section is allowed only to the extent such amount is not deductible in d…

(2). The amount of any contribution by the State of Alabama or any political subdivision thereof computed in accordance with 26 U.S.C. § 118(b)(2), to the extent that the amount is included in the corporation’s federal taxable income pursuant to 26 U.S.C. § 118(b)(2) shall be ded…

Repealed by Act 99-664, effective Dec. 31, 2000. History: (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §403; Acts 1985, No. 85-515, §18.)

As used in this article, the following terms shall have the following meanings: (1) COMMISSIONER. The Commissioner of Revenue of the State of Alabama. (2) OUT-OF-STATE ADOPTION. An adoption through an out-of-state or foreign agency or government, through private individuals who a…

(a) A taxpayer shall be allowed a one time, refundable credit against the tax imposed by Section 40-18-2, for a private adoption or the adoption of a qualified foster child until December 31, 2022. The amount of such credit shall be one thousand dollars ($1,000) per child adopted…

Repealed by Act 2015-121 effective October 15, 2015. History: (Act 2014-413, p. 1517, §3.)

The commissioner shall be authorized to promulgate any rules necessary to implement and administer this article. History: (Act 2014-413, p. 1517, §4.)

In computing net income of corporations, no deduction shall in any case be allowed in respect to any of the items specified in Section 40-18-17. History: (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §404.)

(a) This article shall be known and may be cited as the Alabama Jobs Act. (b) The Legislature makes the following findings: (1) The economic well-being of the citizens of the state will be enhanced by the increased development and growth of employment within Alabama. (2) It is in…

The Legislature finds as follows: (a) While Alabama’s incentive programs have succeeded in growing industry in the more populated parts of the state, Alabama’s rural and low growth communities have not enjoyed the same rates of success. (b) Alabama’s incentives grew out of a need…

For a company to receive one or both of the jobs act incentives provided in this article, all of the following shall occur: (1) There must be a qualifying project predominantly conducting an activity specified in Section 40-18- 372(1); (2) The qualifying project shall create at l…

June 1, 2026.] AMENDED BY ACT 2026-550, EFFECTIVE JUNE 1, 2026. SEE ACT FOR REVISED LANGUAGE. A qualifying project must be found by the Secretary of Commerce to conduct an activity specified in subdivision (1) and to meet the minimum standard set forth in subdivision (2). (1) A q…

In order for a company to be an approved company, all of the following shall occur: (1) For any company that proposes a qualifying project, the Secretary of Commerce shall make all of the following findings: a. That the project is in fact a qualifying project; b. That the qualify…

(a) An incentivized company may claim either or both of the jobs act incentives, to the extent provided in the project agreement. (b) In order for an incentivized company to claim the jobs act incentives, the Governor and the incentivized company shall execute a project agreement…

(a)(1) If provided for in the project agreement and in accordance with the terms therein, the incentivized company is allowed a jobs credit against utility taxes, in an annual amount up to 3 percent of the wages paid to eligible Alabama resident employees during the prior year. T…

(a) If provided for in the project agreement, the incentivized company is allowed an investment credit in an annual amount up to 1.5 percent of the capital investment incurred as of the beginning of the incentive period, to be used as follows: (1) To offset the income taxes found…

(a) As used in this section, the following terms have the following meanings: (1) JUMP START COUNTY. Any Alabama county that meets all the following: a. Does not qualify as a targeted county. b. Has experienced negative population growth over the last five years as determined by …

(a) The provisions in this section shall apply to the following: (1) Any incentivized company that employed, in the prior year, at least 12 percent of its employees as veterans who received an honorable or general discharge. (2) Any incentivized company with a qualifying project …