Ala. Admin. Code r. 810-2-7-.03
Current through Register Vol. 43, No. 1, October 31, 2024
Section 810-2-7-.03 - Qualification For Credit And Continuing Availability Requirements(1) Scope. This regulation applies to the minimum criteria required for a Project to qualify for the Capital Credit and continuing availability requirements.(2) Definition. Terms defined in Reg. 810-2-7-.01 are incorporated herein by reference for purposes of this regulation, unless the context clearly indicates otherwise.(3) Purpose. The purpose of this regulation is to specify the minimum criteria required in order to qualify a Project to receive the credit against the Alabama income tax liability and continuing availability requirements.(4) Procedure. A project sponsored or undertaken by one or more Investing Companies which is in compliance with the capital cost requirements and which is in compliance during the tax year with, the new employees requirements, the base wage requirements, and the continuing availability requirements shall entitle the Investing Company or Companies, or the shareholders, partners, members, owners, or beneficiaries to the Capital Credit. (a) Minimum Capital Costs 1. Capital Costs incurred which are not less than $2,000,000 and the Predominant Trade or Business Activity conducted at the Project will constitute an Industrial, Warehousing or Research activity.2. A Small Business Addition the Capital Costs incurred which are not less than $1,000,000 and the Predominant Trade or Business Activity conducted at the Project will constitute and Industrial, Warehousing or Research activity.3. A Headquarters Facility the capital cost of which is not less than $2,000,000.(b) Minimum New Employees 1. Not less than 20 jobs for New Employees at a Qualifying Project other than a Small Business Addition must be provided beginning with the date which is not later than one year after the Qualifying Project is Placed in Service and the average wages for all New Employees at the Qualifying Project be not less than the Base Wage Requirement by the date which is not later than one year after the Qualifying Project is Placed in Service and during each year during which all or part of the Capital Credit is available with respect to the Qualifying Project.2. Not less than 15 jobs for New Employees at a Qualifying Project which is a Small Business Addition must be provided beginning with the date which is not later than one year after the Qualifying Project is Placed in Service and the average wages for each all New Employees at the Qualifying Project be not less than the Base Wage Requirement of this regulation by the date which is not later than one year after the Qualifying Project is Placed in Service and during each year during which all or part of the Capital Credit is available with respect to the Qualifying Project.3. If an Investing Company closes an existing facility in this sate and within two years following the closing of the existing facility places a Qualifying Project in service, only the number of jobs for New Employees in excess of the number of employees who worked at the existing facility at the time of the closure shall be deemed jobs for New Employees for the purposes of determining the number of jobs for New Employees.4. A company shall be considered to have met the employment requirement for the portion of the year following the date upon which such requirement is first met and for each year thereafter (such portion of a year and each full year thereafter during the 20 year credit period is hereinafter referred to as a Compliance Year) if the employment requirement is satisfied for at least 11/12 of each Compliance Year.(c) Base Wage Requirements1. Unless a Qualifying Project is a direct project is a direct processor of agricultural food products, all New Employees at a Qualified Project must either have an average hourly wage of at least eight dollar ($8) per hour or an average Total Compensation of at least ten dollars ($10) per hour. Direct processors of agricultural food products are subject to the local labor market.2. A company shall be considered to have met the wage requirement for the portion of the year following the date upon which such requirement is first met and for each year thereafter (such portion of a year and each full year thereafter during the 20 year credit period is hereinafter referred to as a Compliance Year) if the wage requirement is met based on an average determined over each Compliance Year.(d) Continuing Availability Requirements. Any Investing Company that meets the employment and wage requirements by a date which is no later than one year after the date on which the Qualifying Project is Placed in Service, but fails to meet such requirements in any subsequent Compliance Year, may still claim the Capital Credit for each Compliance Year in which such Investing Company again meets the employment and wage requirements of this section. In no event, however, shall an Investing Company be able to claim a Capital Credit in a Compliance Year beginning after the third Compliance Year (whether or not consecutive) in which the Investing Company fails to meet the employment and wage requirements of this section or more than nineteen (19) years after the year in which the Qualifying Project is first Placed in Service. Author: Verlon Frost, Melody Moncrief, Jeff Taylor
Ala. Admin. Code r. 810-2-7-.03
New Rule: Filed June 17, 1996; effective July 22, 1996. Amended: Filed January 26, 1998; effective March 2, 1998.Statutory Authority:Code of Ala. 1975, §§ 40-2A-7(A)(5), 40-18-197.