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Alabama Code (Last Updated: November 28, 2014) |
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Title40 REVENUE AND TAXATION. |
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Chapter9B. TAX INCENTIVE REFORM ACT OF 1992. |
§40-9B-3. Definitions.
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(a) For purposes of this chapter, the following words and phrases mean:
(1) ABATE, ABATEMENT. A reduction or elimination of a taxpayer's liability for tax or payments required to be made in lieu thereof. An abatement of transaction taxes imposed under Chapter 23 of this title, or payments required to be made in lieu thereof, shall relieve the seller from the obligation to collect and pay over the transaction tax as if the sale were to a person exempt, to the extent of the abatement, from the transaction tax.
(2) ALTERNATIVE ENERGY RESOURCES. The definition given in Section 40-18-1.
(3) CONSTRUCTION RELATED TRANSACTION TAXES. The transaction taxes imposed by Chapter 23 of this title, or payments required to be made in lieu thereof, on tangible personal property and taxable services incorporated into an industrial development property, the cost of which may be added to capital account with respect to the property, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses.
(4) DATA PROCESSING CENTER. An establishment at which not less than 20 new jobs are located, the average annual total compensation, including benefits, of such new jobs to be not less than forty thousand dollars ($40,000) and such establishment is engaged in the provision of complete processing and specialized reports from data, the provision of automated data processing and data entry services, the provision of an infrastructure for hosting or data processing services, the provision of specialized hosting activities, the provision of application service provisioning, the provision of general time-share mainframe facilities, or some combination of the foregoing, without regard to whether any other activities are conducted at the establishment.
(5) EDUCATION TAXES. Ad valorem taxes, or payments required to be made in lieu thereof, that must, pursuant to the Constitution of Alabama of 1901, as amended, legislative act, or the resolution or other action of the governing board authorizing the tax, be used for educational purposes or for capital improvements for education and local construction related transaction taxes levied for educational purposes or for capital improvements for education.
(6) HEADQUARTERS FACILITY. Any trade or business described in the 2007 North American Industry Classification System, promulgated by the Executive Office of the President of the United States, Office of Management and Budget, National Industry 551114, at which not less than 50 new jobs are located.
(7) HYDROPOWER PRODUCTION. The definition given in Section 40-18-1.
(8) INDUCEMENT. Refers to an agreement, or an "inducement agreement," entered into between a private user and a public authority or county or municipal government and/or a resolution or other official action, an "inducement resolution," "inducement letter," or "official action" adopted by a public authority or county or municipal government, in each case expressing, among other things, the present intent of such public authority or county or municipal government to issue bonds in connection with the private use property therein described.
(9) INDUSTRIAL DEVELOPMENT PROPERTY. Real and/or personal property acquired in connection with establishing or expanding an industrial or research enterprise in Alabama.
(10) INDUSTRIAL OR RESEARCH ENTERPRISE.
a. Any trade or business described in the 2007 North American Industry Classification System, promulgated by the Executive Office of the President of the United States, Office of Management and Budget, Sectors 31 (other than National Industry 311811), 32, and 33; Subsectors 423, 424, 493 where the trade or business will (i) provide logistics services related to the distribution of goods, (ii) employ 50 or more persons within the first two years after being placed in service, and (iii) involve a capital investment of at least five million dollars ($5,000,000), except that the investment in a trade or business located in a favored geographic area, as that term is defined in Section 40-18-190(a)(6), must exceed one million dollars ($1,000,000), 511, and 927; Industry Groups 2121, 5417, 5415, and 5182 (without regard to the premise that data processing and related services be performed in conjunction with a third-party); Industries 11331 and 48691; and National Industries 115111, 517110, 541380, and 561422 (other than establishments that originate telephone calls) and includes such trades and businesses as may be hereafter added by an act of the Legislature, reclassified in any subsequent publication of the North American Industry Classification System or other industry classification system developed in conjunction with the United States Department of Commerce, or any process or treatment facility which recycles, reclaims, or converts any materials, which include solids, liquids, or gases, to a reusable product.
b. With respect to abatements granted in accordance with Section 40-9B-9, and only with respect to such abatements, "industrial or research enterprise" means any trade or business described in the 2007 North American Industry Classification System within Subsector 493 (Warehousing and Storage), Industry Number 488310 (Port and Harbor Operations), or Industry Number 488320 (Marine Cargo Handling), when such trade or business is conducted on premises in which the Alabama State Port Authority has an ownership, leasehold, or other possessory interest and such premises are used as part of the operations of the Alabama State Port Authority.
c. "Industrial or research enterprise" includes the above-described trades and business and any others as may hereafter be reclassified in any subsequent publication of the NAICS or similar industry classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
d. "Industrial or research enterprise" also includes any underground natural gas storage facility which is located in the Gulf Opportunity Zone, as that phrase is defined in the Gulf Opportunity Zone Act of 2005, developed from existing geologic reservoirs, including, without limitation, salt domes, and placed in service on or before December 31, 2013.
e. "Industrial or research enterprise" also includes any plant, property, or facility that meets both of the following:
1. It produces electricity from:
(i) Alternative energy resources and has capital costs of at least one hundred million dollars ($100,000,000); or
(ii) Hydropower production and has capital costs of at least five million dollars ($5,000,000).
2. All or a portion of the plant, property, or facility is owned by one or more of the following: A utility described in Section 37-4-1(7)a., an entity organized under the provisions of Chapter 6 of Title 37, or an authority both organized and existing pursuant to the provisions of Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, or an entity in which one or more of the foregoing owns an interest.
f. "Industrial or research enterprise" also includes any headquarters facility.
g. "Industrial or research enterprise” also includes any data processing center.
h. "Industrial or research enterprise" also includes any research and development facility.
i. "Industrial or research enterprise" also includes any renewable energy facility.
j. "Industrial or research enterprise" also includes any tourism destination attraction.
(11) MAJOR ADDITION. Any addition to an existing industrial development property that equals the lesser of: 30 percent of the original cost of the industrial development property or two million dollars ($2,000,000). For purposes of this subsection, the original cost of existing industrial development property shall be the amount of industrial development property with respect to which an abatement was granted under this chapter when the property was constructed, or if the existing industrial development property was constructed before January 1, 1993, the maximum amount that would have been allowed if the provisions of this chapter had applied at the time it was constructed. Only property that constitutes industrial development property shall be taken into account in making the determination in the previous sentence. Major addition shall include any addition costing at least two million dollars ($2,000,000) which constitutes an industrial or research enterprise, regardless of whether added to an existing industrial development property.
(12) MAXIMUM EXEMPTION PERIOD. Except as provided in Section 40-9B-11, either
a. A period equal to the shorter of:
1. Ten years from and after: (i) The date of initial issuance by a county, city, or public authority of bonds to finance any costs of a private use property, or (ii) If no such bonds are ever issued, the later of: A. The date on which title to the property was acquired by or vested in the county, city, or public authority, or B. The date on which the property is or becomes owned, for federal income tax purposes, by a private user; or
2. The weighted average economic life of the assets comprising such property, determined consistently with the provisions of 26 U.S.C. § 147(b) and measured from the date such property is placed in service; or
b. Exclusively with respect to a private user of a data processing center, (i) a period of 10 years from and after the date on which private use property is or becomes owned, for federal income tax purposes, by such private user, if the aggregate capital investment in the data processing center by the private user does not exceed $200,000,000 within 10 years from the date on which the private user commences the acquisition, construction, and equipping of the data processing center, (ii) a period of 20 years from and after the date on which private use property is or becomes owned, for federal income tax purposes, by such private user, if the aggregate capital investment in the data processing center by the private user exceeds $200,000,000 but is not greater than $400,000,000 within 10 years from the date on which the private user commences the acquisition, construction, and equipping of the data processing center, or (iii) a period of 30 years from and after the date on which private use property is or becomes owned, for federal income tax purposes, by such private user, if the aggregate capital investment in the data processing center by the private user exceeds $200,000,000 within 10 years from the date on which the private user commences the physical work of constructing and equipping the data processing center and exceeds $400,000,000 within 20 years from the date on which the private user commences the acquisition, construction, and equipping of the data processing center. For purposes of this paragraph b., a private user's aggregate capital investment in a data processing center shall include all real and personal property comprising a data processing center, the costs of which may be capitalized for federal income tax purposes. In no event shall abatements of construction related transaction taxes or noneducational ad valorem taxes granted for a data processing center apply beyond the expiration of the applicable maximum exemption period.
(13) MORTGAGE AND RECORDING TAXES. The taxes imposed by Chapter 22 of this title.
(14) NONEDUCATIONAL AD VALOREM TAXES. Ad valorem taxes, or payments required to be made in lieu thereof, imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama that are not required to be used for educational purposes or for capital improvements for education.
(15) PERSON. Includes any individual, partnership, trust, estate, or corporation.
(16) PRIVATE USER. Any individual, partnership, or corporation organized for profit that is or will be treated as the owner of private use property for federal income tax purposes, any entity organized under Chapter 6 of Title 37, and any authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(17) PRIVATE USE INDUSTRIAL PROPERTY. Private use property that also constitutes industrial development property.
(18) PRIVATE USE PROPERTY. Any real and/or personal property which is or will be treated as owned by a private user for federal income tax purposes even though title may be held by a public authority or municipal or county government; any real and/or personal property which is owned by any entity organized under Chapter 6 of Title 37; and any real and/or personal property which is owned by any authority both organized and existing pursuant to Chapter 50A of Title 11, and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(19) PUBLIC AUTHORITY. A corporation created for public purposes pursuant to a provision of the Constitution of Alabama of 1901, or a general or local law that authorized it to issue bonds, the interest on which is exempt from the Alabama income tax, as in effect on May 21, 1992.
(20) PUBLIC INDUSTRIAL AUTHORITY. A public authority authorized to issue bonds to acquire, construct, equip, or finance industrial development property.
(21) RENEWABLE ENERGY FACILITY. Any plant, property, or facility that either:
a. Produces electricity or natural gas, in whole or in part, from biofuels as such term is defined in Section 2-2-90(c)(2) or from renewable energy resources as such term is defined in Section 40-18-1(30) with the exception that hydropower production shall be excluded from such definition; or
b. Produces biofuel as such term is defined in Section 2-2-90(c)(2).
(22) RESEARCH AND DEVELOPMENT FACILITY. An establishment engaged in conducting original investigations undertaken on a systematic basis to gain new knowledge or applying research findings or other scientific knowledge to create new or significantly improved products or processes, or both.
(23) STATEMENT OF INTENT. A written statement of intent to claim an abatement provided in this chapter, or to petition for local tax abatement, relating to an industrial or research enterprise described in paragraph e. of subdivision (10) of this subsection that is filed with the Department of Revenue at any time prior to the date on which the industrial or research enterprise described in paragraph e. of subdivision (10) of this subsection is placed in service in accordance with such procedures and on such form or forms as may be prescribed by the Department of Revenue. Such statement of intent shall contain a description of the industrial or research enterprise described in paragraph e. of subdivision (10) of this subsection; the date on which the acquisition, construction, installation, or equipping of the industrial or research enterprise described in paragraph e. of subdivision (10) of this subsection was commenced or is expected to commence; the actual or, if not known, the estimated capital costs of the industrial or research enterprise described in paragraph e. of subdivision (10) of this subsection; the number of new employees to be employed at the industrial or research enterprise described in paragraph e. of subdivision (10) of this subsection; and any other information required by the Department of Revenue.
(24) TOURISM DESTINATION ATTRACTION. A commercial enterprise which is open to the public not less than 120 days during a calendar year and is designed to attract visitors from inside or outside of the State of Alabama, typically for its inherent cultural value, historical significance, natural or man-made beauty, or entertainment or amusement opportunities. The term shall include, but not be limited to, a cultural or historical site; a botanical garden; a museum; a wildlife park or aquarium open to the public that cares for and displays a collection of animals or fish; an amusement park; a convention hotel and conference center; a water park; or a spectator venue or arena.
A tourism destination attraction shall not include a facility primarily devoted to the retail sale of goods; a shopping center; a restaurant; a movie theater; a bowling alley; a fitness center; a miniature golf course; or a nightclub. Provided, however, that the capital costs of the construction of a tourism destination attraction may include the capital costs associated with the construction of any retail establishment, restaurant or other portion of the tourism destination attraction. The term also does not include any gaming facility or establishment that the Secretary of the Department of Commerce deems to be serving the local community.
(b) The abatements of ad valorem taxes, and payments in lieu thereof, allowed by amendments to this section by Act 2008-275 shall become effective for projects for which statements of intent are filed after December 31, 2011. No ad valorem taxes, or payments in lieu thereof, shall be abated for periods prior to January 1, 2012. The other abatements allowed by amendments made to this section by Act 2008-275 shall become effective after December 31, 2011.
For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)j., the approval of the abatement of a specified ad valorem tax or construction related tax levied or imposed by a county or municipality, or payments required to be made in lieu thereof, shall take effect only upon adoption of a resolution by the governing body of that county or municipality approving such abatement or abatements.