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Alabama Code (Last Updated: November 28, 2014) |
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Title40 REVENUE AND TAXATION. |
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Chapter18. INCOME TAXES. |
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Article7. Tax Credits for Projects of New Businesses and Business Expansions. |
§40-18-193. Qualifications for capital credits.
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(a) It shall be a condition to the receipt of a capital credit that:
(1) For a qualifying project described in Section 40-18-190(a)(13)c. or f., not less than 50 jobs for new employees at the qualifying project be provided commencing with the date which is not later than one year after the qualifying project is placed in service and that 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 any part of the capital credit is available with respect to the qualifying project.
(2) For a qualifying project described in Section 40-18-190(a)(13)i., not less than 50 jobs for new employees at the qualifying project be provided commencing with the date which is not later than two years after the qualifying project is placed in service and that 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 two years after the qualifying project is placed in service and during each year during which all or any part of the capital credit is available with respect to the qualifying project.
(3) For any qualifying project described in Section 40-18-190(a)(13)j., either of the following occur:
a. Not less than 50 jobs for new employees at the qualifying project except as otherwise provided in this subdivision and commencing with the date which is not later than one year after the qualifying project is placed in service and that 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 any part of the capital credit is available with respect to the qualifying project.
b. Not less than 20 jobs for new employees at the qualifying project which is located in a favored geographic area and commencing with the date which is not later than one year after the qualifying project is placed in service and that the average wages for all new employees at the qualifying project be not less than the base wage, as defined in Section 40-18-190(a)(1), 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.
(4) For any qualifying project other than a qualifying project described in Sections 40-18-190(a)(13)c., i., or j., either of the following occur:
a. Not less than 20 jobs for new employees at a qualifying project except as otherwise provided in this subdivision and commencing with the date which is not later than one year after the qualifying project is placed in service and that 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 any part of the capital credit is available with respect to the qualifying project.
b. Not less than 15 jobs for new employees at the qualifying project which is a small business addition be provided commencing with the date which is not later than one year after the qualifying project is placed in service and that 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 any part of the capital credit is available with respect to the qualifying project.
c. Not less than five jobs for new employees at the qualifying project which is located in a favored geographic area and commencing with the date which is not later than one year after the qualifying project is placed in service and that the average wages for all new employees at the qualifying project be not less than the base wage, as defined in Section 40-18-190(a)(1), 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.
If an investing company closes or reduces its level of employment at an existing facility in this state and within two years following the closing or reduction in its level of employment places a qualifying project in service, only the number of new employees in excess of the number of employees who worked at the existing facility at the time of the closure or prior to the reduction in employment shall be deemed to be new employees for purposes of this section.
(b) The Legislature recognizes that one or more entities may enter into a joint venture in the form of a limited liability company, partnership, or other form of business entity in connection with a qualifying project. It is the intent of this article that the requirements of this article respecting minimum capital costs and employment be applied to the qualifying project and that the capital credit be available and granted to those entities liable for or against which the state income tax is allocated or assessed with respect to the income generated by or arising out of the qualifying project. It shall not be a requirement of this article that the entity employing any new employees be the same entity entitled to receive the capital credit so long as the requirements of capital costs and new employees are implemented and maintained with respect to the qualifying project.
(c) A change of ownership or assignment of interest in any qualifying project shall not qualify the qualifying project or any taxpayer to receive any additional capital credits, and the purchaser, assignee, or successor of the qualifying project or interests therein shall be entitled to the capital credit upon the same conditions and for the same period as the investing company or companies originally entitled to the capital credit.
(d) The Legislature recognizes that while certain periods specified in this article with respect to the capital credit are measured by calendar years it will be necessary for the capital credit to be applied with respect to the tax years of the recipients of the capital credit. Accordingly, the department is hereby authorized to adopt regulations to provide that the capital credit may be allocated to the tax years of the recipient of the capital credit, including the method of determining the pro rata amount of capital credit, if any, available where the tax year of the recipient of the capital credit will end subsequent to the end of any calendar year period specified in this article.
(e) A company shall be considered to have met the employment and wage requirements for the portion of the year following the date upon which such requirements are first met and for each full 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 and the wage requirement is met based on an average determined over each compliance year.
(f)(1) Any investing company that meets the employment and wage requirements of this section by a date which is not 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: (i) 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 (ii) more than nineteen (19) years after the year in which the qualifying project is first placed in service.
(2) Any investing company that files a written statement of intent (Form INT) with the department after May 21, 2009 and that meets the employment and wage requirements of this section by a date which is not 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, shall forfeit a percentage of the capital credits claimed in the prior five years. The forfeiture shall equal 100 percent of the capital credits claimed in the year immediately preceding the year in which the investing company fails to maintain the employment and wage requirements of this section. The forfeiture percentage shall be reduced by 20 percent for each successive prior year in the five year forfeiture period. The forfeiture of capital credits shall be treated in the same manner as the imposition of the tax imposed by this chapter and shall be payable by the investing company on the fifteenth day of the third month following the close of the year in which the investing company failed to meet the employment and wage requirements of this section.