Title 40

For purposes of applying the provisions of this chapter which relate to employee fringe benefits, the Alabama S corporation shall be treated as a partnership, and any two-percent shareholder of the Alabama S corporation shall be treated as a partner of such partnership. The term …

(a) For purposes of this article, except as provided in subsection (b), each shareholder’s pro rata share of any item for any taxable year shall be the sum of the amounts determined with respect to the shareholder by assigning an equal portion of the item to each day of the taxab…

(a) For purposes of this article, the term “post-termination transition period” means: (1) The period beginning on the day after the last day of the corporation’s last taxable year as an Alabama S corporation and ending on the later of: a. The day which is one year after the last…

Due consideration shall be given in the interpretation of this article to applicable sections of the U.S. Internal Revenue Code in effect from time to time, its rulings and regulations provided such Code, rulings, and regulations are not in direct conflict with any portion of thi…

(a) If for any taxable year beginning in the recognition period an Alabama S corporation has a net recognized built-in gain, there is hereby imposed a tax (computed under subsection (b)) on the income of such corporation for such taxable year. (b)(1) The amount of the tax imposed…

(a) If for the taxable year an Alabama S corporation has accumulated earnings and profits at the close of the taxable year derived from years during which the corporation was an Alabama C corporation, and gross receipts more than 25 percent of which are passive investment income,…

(a) The Department of Revenue shall permit an Alabama S corporation to file composite returns and to make composite payments on behalf of some or all of its nonresident shareholders if there are one or more nonresident shareholders during any part of the taxable year. The Departm…

(a) For the tax years beginning on and after January 1, 1995, every person that is doing business in Alabama, as a producer of coal mined in Alabama, shall be allowed a coal production credit to be used as provided in subsection (b) in the amount of one dollar ($1) per ton of inc…

The Department of Revenue shall promulgate and issue rules and regulations to implement and administer this article. (Acts 1995, No. 95-239, p. 403, §2.)

(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028. (Act 2023-546, §§4, 11.)

This article shall be known as the Reemployment Act of 2010. (Act 2010-557, p. 1132, §1.)

(a) An Alabama income tax deduction is established for employers that create new jobs for unemployed persons. The deduction shall equal 50 percent of the gross wages paid to each person hired by an employer who, at the time of such employment, was drawing unemployment compensatio…

The Department of Revenue shall have the authority to adopt such rules as necessary to carry out this article. (Act 2010-557, p. 1132, §3.)

(a) The Reemployment Act of 2010, Article 10, commencing with Section 40-18-270, 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 years.(b) The repealing of the incen…

This article may be cited as the Full Employment Act of 2011. (Act 2011-551, p. 1017, §1.)

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. (Act 2011-551, p. 1017, §2.)

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 Legislature intends to foster an optimal environment for job growth throughout the state. (Act 2011-551,…

(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 credit shall equal one thousand dollars ($1,000) and shall be available in the tax year during which …

(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 additional years.(b) The repealing of the in…

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 policyholder who is a state income taxpayer for residential property in this state to cov…

(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 contributed to a catastrophe savings account in accordance with subsection (c), and all interest income earned by a catastrophe sa…

(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 qualified catastrophe expenses. (b) No amount is included in income, pursuant to subsection (a), if the qualified catastroph…

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

This article shall be known and may be cited as the Veterans Employment Act. (Act 2012-168, p. 254, §1; Act 2018-194, §1.)

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 Department of Defense designated combat zone and was a resident of the State of Alabama at the time of his…

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 credit is available to a business that meets the requirements for a tax credit under Section 40-18-…

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 for an additional nonrefundable credit against the income tax liability imposed or the state portio…

(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 of a business plan. (2) Professional services associated with the formation of the business (e.g., …

(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) Promote awareness of the unemployed veteran tax credit authorized in this article to employers and eli…

(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 years.(b) The repealing of the incent…

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 Industry Classification System, Sector 11, and includes such trades or businesses that may be hereafter r…

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 irrigation equipment under the provisions of 26 U.S.C. §179, as such section existed on January 1, 20…

(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 business an income tax credit equal to 20 percent of the cost of the purchase and installation of a…

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 administered by the Alabama Office of Water Resources. (Act 2012-391, p. 1049, §4.)

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 Water Conservation Committee (ASWC) for technical service for the eligible applicants. (Act 2012-3…

(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 additional years.(b) The repealing of th…

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…

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

(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 le…

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 qualifying project must predominantly conduct an activity that is any one or more of the follow…

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…