Section 41-10-844 - Use of Innovating Alabama tax credits; funding; rules(a) A taxpayer is allowed an Innovating Alabama tax credit to be applied against all of the following: (1) To offset the income taxes levied in Chapter 18 of Title 40 or as an estimated tax payment of income taxes.(2) To offset the state portion of the financial institution excise tax levied in Chapter 16 of Title 40.(3) To offset the insurance premium tax levied by subsection (a) of Section 27-4A-3.(4) To offset state license taxes levied by Article 2 of Chapter 21 of Title 40.(b) In no event shall the Innovating Alabama tax credit cause a taxpayer's tax liability to be reduced by more than 50 percent. Unused credits may be carried forward for no more than five years.(c) Innovating Alabama tax credits shall be granted to taxpayers using an online system administered by the Department of Revenue. The online system shall allow taxpayers to agree to make a cash contribution to an economic development organization which was approved by Innovate Alabama, as provided in Section 41-10-843. The online system shall ensure that Innovating Alabama tax credits are not granted for contributions to an economic development organization in excess of the amounts approved by Innovate Alabama, as provided in Section 41-10-843.(d) The cumulative amount of funding approved pursuant to this section shall not exceed twenty-five million dollars ($25,000,000) in a calendar year for calendar years beginning January 1, 2023. The Department of Commerce shall enter into a memorandum of understanding with Innovate Alabama to provide administrative assistance to manage the Innovating Alabama tax credit program; provided, that this memorandum of understanding shall terminate on December 31, 2023.(e) Innovate Alabama shall reserve at least ten million dollars ($10,000,000) of the amounts specified in subsection (d) for projects described in Section 41-10-842(a)(1)b.(f) To the extent that an Innovating Alabama tax credit is used by a taxpayer, the taxpayer shall not be allowed any deduction that would have otherwise been allowed for the taxpayer's contribution. Tax credits may only be claimed by the donating taxpayer and may not be assigned or transferred to any other taxpayer. For purposes of this section, a donating taxpayer includes a taxpayer who is a shareholder of an Alabama S corporation or a partner or member of a subchapter K entity that made a contribution to an economic development organization which was approved by Innovate Alabama.(g) The Department of Finance shall adopt rules to ensure that the Innovating Alabama tax credit program in no case would reduce the distribution for the Alabama Special Mental Health Trust Fund by using any unencumbered funds to ensure that an Innovating Alabama tax credit shall not be limited, prevented, or reduced.Ala. Code § 41-10-844 (1975)
Added by Act 2023-33,§ 2, eff. 4/20/2023.