§40-18-209. Availability of tariff credit on pass-through basis.

(a) The Legislature recognizes that a substantial number of businesses are organized as limited liability companies, partnerships, and other types of business entities and that certain business entities, organized as corporations, elect to be treated as S corporations under federal and state tax laws, and that it is essential that the tariff credit amount shall be available on a pass-through basis in the manner hereinafter provided.

(b) Each investing company, or its shareholders, partners, members, owners, or beneficiaries shall be entitled to the tariff credit for each tax year of an investing company with respect to which a tariff credit is provided pursuant to this article. The tariff credit shall be allowed as follows:

(1) The owner of an investing company which is a proprietorship shall receive a tariff credit against the individual income tax levied by Section 40-18-5 that otherwise would be owed to the state in any year by the owner with respect to the tariff costs incurred during the project term by an investing company.

(2) An investing company which is an Alabama C corporation as defined in Section 40-18-160 or which is an Alabama S corporation and which is subject to taxation under Sections 40-18-174 or 40-18-175 shall receive a credit against the corporate income tax levied by Sections 40-18-31, 40-18-174, or 40-18-175 that otherwise would be owed to the state in any year by the investing company with respect to the tariff costs incurred during the project term by an investing company.

(3) The shareholders of an investing company which is an Alabama S corporation as defined in Section 40-18-160 and whose taxable income is subject to determination under Section 40-18-161, each shall receive a credit against the individual income tax levied by Section 40-18-5 that otherwise would be owed to the state in any year by each shareholder of the investing company with respect to the tariff costs incurred during the project term by an investing company.

(4) The partners, members, or owners of an investing company, the income of which is subject to taxation under Section 40-18-24, each shall receive a credit against the corporate income tax levied by Section 40-18-31 or against the individual income tax levied by Section 40-18-5, whichever is applicable to each such partner, member, or owner that otherwise would be owed to the state in any year by each partner, member, or owner of the investing company with respect to the tariff costs incurred during the project term by an investing company.

(5) An investing company which is a trust or estate having income subject to taxation under subsection (c) of Section 40-18-25 shall receive a credit against the income tax levied by Section 40-18-5 that otherwise would be owed to the state in any year with respect to the tariff costs incurred during the project term by an investing company.

(6) The beneficiaries of an investing company which is a trust or estate the income of which is subject to taxation under subsection (d) of Section 40-18-25 each shall receive a credit against the corporate income tax levied by Section 40-18-31 or against the individual income tax levied by Section 40-18-5, whichever is applicable to each beneficiary, that otherwise would be owed to the state in any year by each beneficiary of the investing company with respect to the tariff costs incurred during the project term by an investing company.

(7) A shareholder, partner, member, owner, or beneficiary which is eligible to receive a credit under subdivision (3), (4), or (6) of this subsection and which is an Alabama S corporation, or which has income which is subject to taxation under Section 40-18-24 or subsection (d) of Section 40-18-25 solely for purposes of the application of this subsection, shall be treated as though the shareholder, partner, member, owner, or beneficiary were also an investing company.

(8) No amount described in this subsection shall be carried back by any investing company, shareholders, partners, members, owners, or beneficiaries with respect to a prior year.

(Act 2011-648, p. 1651, §5.)