§ 40-9F-33 — Limitations on Tax Credits; Historic Income Tax Credit Account; Transfer or Assignment of Tax Credits

Alabama § 40-9F-33

• Jurisdiction: Alabama
• Title 40: Revenue and Taxation
• Ch. 9F: Rehabilitation of Historic Structures
• Art. 2: 2017 Tax Credit for Historic Structures

Text

(a) The state portion of any tax credit against the tax imposed by Chapter 18 for the taxable year in which the reservation is allocated to a project or the certified rehabilitation is placed in service shall be equal to 25 percent of the qualified rehabilitation expenditures for certified historic structures. No tax credit claimed for any certified rehabilitation may exceed five million dollars ($5,000,000) for all allowable property types.
(b) There is created within the Education Trust Fund a separate account named the Historic Preservation Income Tax Credit Account. The Commissioner of Revenue shall certify to the Comptroller the amount of income tax credits under this section and the Comptroller shall transfer into the Historic Preservation Income Tax Credit Account only the amount from sales tax revenues within the Education Trust Fund that is sufficient for the Department of Revenue to use to cover the income tax credits for the applicable tax year. The Commissioner of Revenue shall distribute the funds in the Historic Preservation Income Tax Credit Account pursuant to this section.
(c) The entire tax credit must be claimed by the taxpayer for the taxable year in which
the reservation is allocated to a project or
the certified rehabilitation is placed in service.
Tax credits shall not be claimed prior to the taxable year in which the certified rehabilitation is placed in service.
Where the taxes owed by the taxpayer are less than the tax credit, the taxpayer shall be entitled to claim a refund for the difference.
In the event that any additional credit is allocated to the taxpayer for a given project, the additional credit must be claimed in the taxable year the additional credit is allocated to the taxpayer.
(d)
(1)
For the tax years 2018 through
2022
, the aggregate amount of all tax credits that may be reserved in any one of such years by the commission and certification of rehabilitation plans under
Section 40-9F-32
(c)
shall not exceed twenty million dollars ($20,000,000), plus any amount of previous reservations of tax credits that were rescinded under
Section 40-9F-32
(c)
during the tax year. However, if all of the allowable tax credit amount for any tax year is not requested and reserved, any unreserved tax credits may be utilized by the commission in awarding tax credits in subsequent years; provided, however, that in no event shall a total of more than two hundred million dollars ($200,000,000) be reserved by the commission during the period from May 25, 2017, through December 31,
2022, pursuant to this article
. Applications shall not be received by the commission after the Historic Tax Credit Evaluating Committee has ranked projects with a total amount exceeding two hundred million dollars ($200,000,000).
(2) For the tax years 2023 through 2027, the aggregate amount of all tax credits that may be reserved in any one of such years by the commission and certification of rehabilitation plans under Section 40-9F-32(c) shall not exceed
twenty million dollars ($20,000,000), plus any amount of previous reservations of tax credits that were rescinded under Section 40-9F-32(c) during the tax year. However, if all of the allowable tax credit amount for any tax year is not requested and reserved, any unreserved tax credits may be utilized by the commission in awarding tax credits in subsequent years; provided, however, that in no event shall a total of more than two hundred million dollars ($200,000,000) be reserved by the commission during the period from May 25, 2017, through December 31, 2027, pursuant to this article.
(3)
For tax years 2023 through 2027, no tax credits shall be reserved for qualified structures the end use of which is proposed to be a disqualifying use.
(4) For purposes of this article, “tax year” shall mean calendar year.
(5) In addition to the limits in subdivision (2), for tax years 2024 through 2027, the commission may utilize an additional amount up to a total of five million dollars ($5,000,000) to reduce the backlog of qualified applications.
(e) Of the annual amount of the tax credits provided for in subsection (d), 40 percent shall be reserved to taxpayers with a certified rehabilitation project located in a county in which the population does not exceed 175,000 according to the most recent federal decennial census. In the event applications are not received and credits are not allocated for projects in these areas by the close of the third quarter of the program year, the funds may revert for allocations of other project applications.
(f) Tax credits granted to a partnership, a limited liability company, S corporations, trusts, or estates, shall be claimed at the entity level and shall not pass through to the partners, members, or owners.
(g) All or any portion of the income tax credits under this section and Section 40-9F-32 shall be transferable and assignable, subject to any notice and verification requirements to be determined by the department, without the requirement of transferring any ownership interest in the qualified structure or any interest in the entity which owns the qualified structure. Any tax credits transferred shall be at a value of at least 85 percent of the present value of the credits. However, once a credit is transferred, only the transferee may utilize
the
credit and the credit
may not
be transferred again. A transferee of the tax credits may use the amount of tax credits transferred to offset any income tax under Chapter 18. The entire tax credit must be claimed by the transferee for the taxable year in which
the reservation is allocated to a project or
the certified rehabilitation is placed in service. When the taxes owed by the transferee are less than the tax credit, the transferee shall be entitled to claim a refund for the difference. The department shall adopt a form transfer statement to be filed by the transferor with the department prior to the purported transfer of any credit issued under this article. The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be transferred to each transferee listed on the form. The transfer statement form shall also contain any other information as the department may from time to time reasonably require. For each transfer, the transferor shall file: (1) a completed transfer statement form; (2) a copy of the tax credit certificate issued by the commission documenting the amount of tax credits which the transferor intends to transfer; (3) a copy of the proposed written transfer agreement; and (4) a transfer fee payable to the department in the amount of one thousand dollars ($1,000) per transferee listed on the transfer statement form. The transferor shall file with the department a fully executed copy of the written transfer agreement with each transferee within 30 days after the completed transfer. Filing of the written transfer agreement with the department shall perfect the transfer with respect to the transferee. Within 30 days after the department’s receipt of the fully executed written transfer agreement, the department shall issue a tax credit certificate to each transferee listed in the agreement in the amount of the tax credit so transferred. The certificate shall be used by the transferee in claiming the tax credit pursuant to subsections (e) and (f) of Section 40-9F-32. The department may adopt additional rules as are necessary to permit verification of the ownership of the tax credits, but shall not adopt any rules which unduly restrict or hinder the transfer of the tax credits.

Legislative History

(Act 2017-380, §4; Act 2021-431, §1; Act 2023-522, §1.)