Title 40 — Title 40

For the purposes of this article, the following terms have the following meanings: (1) APPLICABLE TAXES. An employer’s, taxpayer’s, or child care provider’s, or in the case of a pass- through entity that is an employer, taxpayer, or child care provider, such employer’s, taxpayer’…

(a) Effective for tax years beginning on or after January 1, 2025, and ending December 31, 2027, unless extended by an act of the Legislature, an employer may apply to the Department of Revenue for an employer tax credit to be applied against applicable taxes. The employer tax cr…

(a) Effective for tax years beginning on or after January 1, 2025, and ending December 31, 2027, unless extended by an act of the Legislature, a child care provider may apply to the Department of Revenue for a facility tax credit to be applied against applicable taxes, in an amou…

(a) The Department of Human Resources may make grants to nonprofit child care providers as provided in this section. (b) The Department of Human Resources may establish priorities, guidelines, standards, and processes by which grants may be awarded. (c) The Department of Human Re…

(a) The Department of Human Resources and the Department of Revenue shall adopt rules as necessary, on or before January 1, 2025, for the implementation and administration of this article. Such rules shall ensure that: (1) At least 25 percent of the amounts specified in Section 4…

(a) All filings and applications made with the Department of Revenue in relation to the employer tax credit or the facility tax credit shall be made using forms adopted by the Department of Revenue. Such applications and filings shall be treated as tax returns, subject to penalti…

Every corporation, joint stock company, or association organized under the laws of the state or organized under the laws of any other state, nation, or territory and doing business in this state, whether taxable under this chapter or not, shall furnish to the officers and employe…

This article, the purpose of which is to generate additional funds for eligible rural general acute care, critical access, and rural emergency hospitals to strengthen their financial viability, shall be known and may be cited as the “Rural Hospital Investment Act of 2025.” Histor…

For the purposes of this article, the following terms have the following meanings: (1) BOARD. The Rural Hospital Investment Program Board. (2) DEPARTMENT. The Alabama Department of Revenue. (3) ELIGIBLE RURAL HOSPITAL. A hospital that meets the requirements set out in Section 40-…

(a) The Rural Hospital Investment Program Board is established within the department to oversee the development and operation of the Rural Hospital Investment Program. The board shall consist of the following members: (1) The Governor, or his or her designee. (2) The State Treasu…

(a) In order to receive qualified donations as an eligible rural hospital under the program, a health care institution shall meet all of the following requirements: (1) Be a rural general acute care hospital, a rural emergency hospital, or a critical access hospital licensed by t…

The board shall do all of the following: (1) No later than November 1 of each year, create an operations manual for identifying rural hospitals and ranking the rural hospitals in order of financial need according to the criteria included in the hospital’s five-year plan. The manu…

Requirements. (a) An eligible rural hospital shall only use qualified donations for the purpose of providing health care to the residents of the area that the rural hospital serves, which may include operational expenditures and expenditures for maintenance, capital upgrades, and…

Annually, the board and the department shall jointly prepare a report that, at a minimum, includes all qualified donations reported by eligible rural hospitals and all tax credits claimed and approved pursuant to this article for the preceding tax year. This report shall be provi…

(a) A taxpayer may claim a tax credit to offset eligible taxes for each qualified donation as provided in this section. (1) For a donor who is a single individual, a head of household, or married filing a separate return: an amount equal to 100 percent of the qualified donations …

(a) The statewide annual aggregate of the tax credit allowed for qualified donations shall not exceed the following amounts: (1) Twenty million dollars ($20,000,000) in the tax year ending December 31, 2026. (2) Twenty-five million dollars ($25,000,000) in the tax year ending Dec…

(a) The department shall adopt rules pursuant to the Alabama Administrative Procedure Act to administer and implement this article, inclusive of the responsibility of the board. The rules shall provide for all of the following: (1) That the tax credits will not reduce the distrib…

to Comply; Limitations on Inspection of Taxpayer’s Records. The Department of Revenue may at any time, in its discretion, require the taxpayer to furnish a sworn statement of the annual return of income made under the provisions of the act of Congress of the United States for the…

THIS SECTION WAS REPEALED BY ACT 2026-34, EFFECTIVE FEBRUARY 4, 2026. History: (Act 2025-404, §11; Act 2026-34, §2.)

The tax credits created by this article may also qualify for federal income tax credits or deductions, but it is not intended for any qualified donation under this article to automatically qualify for any federal income tax credit or deduction. History: (Act 2025-404, §12.)

(a) The tax credits provided by this article may be claimed beginning January 1, 2026, for the 2026 tax year. (b) Except as provided in Section 40-18-557(b)(2), no tax credit may be claimed after tax year 2028. History: (Act 2025-404, §13.)

The Department of Revenue shall from time to time, as said department shall deem desirable, promulgate such reasonable rules and regulations governing procedure and methods of ascertaining and determining gains and income so as to conform as nearly as possible to the best account…

There is hereby appropriated out of the proceeds of the income tax levied and collected under the provisions of this chapter to the Property Tax Relief Fund such an amount as may be necessary for the replacement of any revenues lost by reason of the exemption of homesteads from a…

In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the Department of Revenue for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the reve…

(a) Basis (unadjusted) of property. The basis of property shall be the cost of the property with the following exceptions: (1) INVENTORY VALUE. If the property should have been included in the last inventory, the basis shall be the last inventory value thereof. (2) GIFT or TRANSF…

(a) The provisions in 26 U.S.C. § 1400Z-2 shall be applicable to an investment in an approved opportunity fund in calculating both of the following: (1) The income tax levied by this chapter, or the estimated income tax payment. (2) The financial institution excise tax found in C…

This section shall be known and may be cited as the “COVID-19 Recovery Capital Credit Protection Act of 2021.” (b) For the purposes of this section the following terms shall have the assigned meanings: (1) APPROVED PROJECT ENTITY. An entity that has filed a notice of intent with …

For tax years ending after March 11, 2021, the date of enactment of the federal American Rescue Plan Act, any amount received from the Administrator of the Small Business Administration in the form of a restaurant revitalization grant under Section 5003 of the American Rescue Pla…

Jobs Act. (a) Effective for tax years beginning on or after January 1, 2024, research and experimental expenditures for Alabama tax purposes under Chapter 16 and Chapter 18 shall not follow the provisions of 26 U.S.C § 174, as amended by the Tax Cuts and Jobs Act (TCJA), P.L. 115…

(a) Computation of gain or loss. Except as hereinafter provided in this section, the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in subsection (b) of Section 40-18-6, and the loss shall …

For the purpose of this article, the following terms shall have the respective meanings ascribed by this section: (1) EMPLOYEE. Employee as defined in the Internal Revenue Code, as amended from time to time. (2) EMPLOYER. Employer as defined in the Internal Revenue Code, as amend…

(a) Every employer, as defined under the laws of the United States in effect July 1, 1982, or as subsequently may be defined, with respect to income tax collected at source, making payment of wages as defined under such laws to employees, shall deduct and withhold upon such wages…

If the remuneration paid by an employer to an employee for services performed during one half or more of any payroll period of not more than 31 consecutive days constitutes wages, all the remuneration paid by such employer to such employee for such period shall be deemed to be wa…

(a) Every employee, on or before the date of commencement of employment, shall furnish his or her employer with a signed Alabama withholding exemption certificate relating to the number of withholding exemptions which he or she claims, which in no event shall exceed the number to…

(a) This section shall be known and may be cited as the “Provisional Construction Employer Withholding Act.” (b)(1) Subsequent to August 1, 2007, in addition to the other requirements contained in this title, all provisional construction employers shall be required to: a. Post a …

(a) Every employer required to deduct and withhold tax under Section 40-18-71 shall for each quarterly period, on or before the last day of the month following the close of each quarterly period, file a return and pay to the Department of Revenue the tax required to be withheld u…

(a) Every person required to deduct and withhold from an employee a tax under Section 40-18-71 shall furnish to each such employee in respect of the remuneration paid by such person to such employee during the calendar year, on or before January 31 of the succeeding year, or, if …

An employer shall be liable for the payment of the tax required to be deducted and withheld under Section 40-18-71 and shall not be liable to any person for the amount of any such payment. History: (Acts 1955, No. 289, p. 661, §7.)

(a) Where there has been an overpayment of tax under Section 40-18-71, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld under Section 40-18-71 by the employer. (b) Any refund allowed by this sectio…

The amount deducted and withheld as tax under Section 40-18-71 during any calendar year upon the wages of any individual shall be allowed as a credit to the recipient of the income against the tax imposed by Section 40-18-5 for taxable years beginning in such calendar year. If mo…

Where there has been an overpayment of any tax imposed under Section 40-18-71 or 40-18-80, the amount of such overpayment, if a petition for refund is timely filed or the department otherwise allows an automatic refund within that period, may be credited against any income tax or…

(a) General rule. Except as provided in this section, upon the sale or exchange of property, the entire amount of the gain or loss determined under Section 40-18-7 shall be recognized. (b) Exchange of stock for stock of same corporation. No gain or loss shall be recognized if com…

(a) A qualified employee’s gain shall not be recognized upon the disposition of his or her ownership interest in a qualified entity, and a qualified investment fund’s gain shall not be recognized upon the disposition of the fund’s ownership interest in a qualified entity. (b) Sub…

Individuals. (a) Individuals. Individuals shall pay estimated income tax in accordance with 26 U.S.C. § 6654 except: (1) The provisions of 26 U.S.C. § 6654(d)(2)(C)(iii) and 26 U.S.C. § 6654(f)(2) shall not apply; (2) Five hundred dollars ($500) shall be substituted for the amoun…

Corporations. (a) Corporations. Corporations shall pay estimated income tax in accordance with 26 U.S.C. § 6655 except: The provisions of 26 U.S.C. § 6655(g)(1)(A)(ii) through (iv) shall not apply. (b) For the purposes of this section: (1) Section 40-18-2 shall be substituted whe…

Any individual may elect to file a “short form” return provided by the Department of Revenue and pay any tax due; provided, that the individual does not have income from sources other than wages except for interest and dividend income of not more than $1,500. Items allowed on the…

Repealed by Act 2010-568, effective with tax years beginning December 31, 2009. History: (Acts 1955, No. 289, p. 661, §13; Acts 1983, No. 83-741, p. 1214, §3; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §6; Act 2001-1088, 4th Sp. Sess., p. 1095, §5.)

Tax. Repealed by Act 2010-568, effective with tax years beginning December 31, 2009. History: (Acts 1955, No. 289, p. 661, §14; Acts 1983, No. 83-741, p. 1214, §4; Act 2001-1088, 4th Sp. Sess., p. 1095, §5.)

Payment of Estimated Tax by Corporations. Repealed by Act 2010-568, effective with tax years beginning December 31, 2009. History: (Acts 1983, No. 83-741, p. 1214, §5.)

Repealed by Act 98-502, §2. History: (Acts 1955, No. 289, p. 661, §15.)