Ala. Admin. Code r. 460-X-25-.03

Current through Register Vol. 43, No. 1, October 31, 2024

Section 460-X-25-.03 - [Effective 12/15/2024] Tax Credit

(1) A tax credit of twenty-five percent (25%) of Qualified Rehabilitation Expenditures is available against any state income tax due that is specified in the Act for the Certified Rehabilitation of Certified Historic Structures. This credit is available for income-producing buildings. It is not available to any residential structure that meets the definition of Disqualifying Use, as described in 460-X-25-.02.

(2) Rehabilitation of a Certified Historic Structure shall be substantial as defined by the term Substantial Rehabilitation.

(3) The tax credit may be earned by the Owner of the Certified Historic Structure. The Applicant shall not be permitted to request the review of another property in the place of the property contained in the Application.

(4) Eligible expenditures include reasonable expenses and costs expended in the Certified Rehabilitation of a Certified Historic Structure as defined by the term Qualified Rehabilitation Expenditures. Eligible expenditures do not include: the cost of acquiring any interest in a Certified Historic Structure or its Property; any expenditure attributable to the enlargement of an existing building; and site work expenditures, including any landscaping, sidewalks, parking lots, paving, decks, outdoor lighting remote from the building, fencing, retaining walls, or similar expenditures because they are not considered made in connection with the rehabilitation of a Certified Historic Structure.

(5) Tax credits granted to a partnership, a limited liability company, S Corporations, trusts, or estates shall be claimed at the entity level and shall not pass through to the partners, members, or owners.

(6) A copy of the completed Certificate shall be filed with the taxpayer's Alabama state tax return. The entire tax credit must be claimed by the taxpayer for the taxable year in which the certified rehabilitation is placed into service. Where the taxes owed by the taxpayer are less than the tax credit, the taxpayer shall be entitled to claim a refund for the difference.

(7) All or any portion of the tax credits under this Act shall be transferable and assignable, subject to any notice and verification requirements to be determined by the Department, without the requirement of transferring any ownership interest in the Qualified Structure. Any tax credits transferred shall be at a value of at least eighty-five percent (85%) of the present value of the credits. However, once a credit is transferred, only the transferee may utilize such credit and the credit cannot be transferred again. The transferee of the tax credits may use the amount of tax credits transferred to offset any income tax due under Chapter 18 of Title 40.

(8) For the purpose of this Program, dates of notification or issuance of any decisions, actions, requests for information, and other correspondence by the Commission shall be in writing, and the date of the notification or issuance shall be stated. The notification or issuance is effective as of the stated date and not the date of receipt by the Applicant.

Ala. Admin. Code r. 460-X-25-.03

Adopted by Alabama Administrative Monthly Volume XXXV, Issue No. 11, August 31, 2017, eff. 9/24/2017.

Amended by Alabama Administrative Monthly Volume XL, Issue No. 03, December 30, 2021, eff. 2/13/2022.

Amended by Alabama Administrative Monthly Volume XLI, Issue No. 09, June 30, 2023, eff. 8/14/2023.

Amended by Alabama Administrative Monthly Volume XLIII, Issue No. 01, October 31, 2024, eff. 12/15/2024.

Author: Chloe Mercer; Lee Anne Hewett

Statutory Authority: Act 2017-380; Act 2021-431; Act 2023-522.