Alabama § 40-14A-24 - Net Worth in Alabama.

§ 40-14A-24. Net Worth in Alabama.

(a) A taxpayer’s net worth in Alabama shall be determined by apportioning the taxpayer’s net worth computed under Section 40-14A-23 in the same manner as prescribed for apportioning income during the determination period for purposes of the income tax levied by Chapter 18, or the manner in which the income would be apportioned if the taxpayer were subject to the income tax, or for the purposes of the financial institution excise tax levied by Chapter 16; provided, however, that the net worth of insurers subject to the insurance premium tax levied by Chapter 4A of Title 27 shall be apportioned on the basis of the ratio of the insurer’s Alabama premium income to its nationwide total direct premiums as reflected on schedule T of the insurer’s annual statement filed with the Commissioner of Insurance for the then immediately preceding calendar year.

(b) There shall be deducted from the amount of net worth in Alabama as determined in accordance with subsection (a):

(1) The net amount invested by the taxpayer in any bond or other security issued before January 1, 2000 by the State of Alabama, or any county, municipality or other political subdivision of the State of Alabama, or any public corporation, agency or instrumentality of the foregoing, but only until the year in which occurs the earlier of the final stated maturity thereof or the date on which the principal of the bond or other security shall be called for optional redemption prior to the final maturity thereof. For purposes of this subdivision, “net amount invested” means the amount of cash, including any premium and net of any discount, paid as the purchase price for the bond or other security, less the amount of any premium amortized and plus the amount of any discount accreted to the date of calculation, reduced by the proportionate amount of principal on the bond or other security that is amortized or otherwise paid or retired. This subdivision shall not apply if the taxpayer is a dealer in securities subject to the rules of 26 U.S.C. §1236.

(2) The net amount invested by the taxpayer in all devices, facilities, or structures, and all identifiable components or materials for use therein, that are located in Alabama and are acquired or constructed primarily for the control, reduction, or elimination of air, ground, or water pollution or radiological hazards where such pollution or radiological hazards result from or would be caused by the taxpayer’s activities in Alabama.

(3) The net amount invested by the taxpayer in all real and tangible personal property, equipment, facilities, structures, and components including, but not limited to, all aircraft replacement parts, components, systems, supplies, and sundries affixed or used on an aircraft, and ground support equipment and vehicles used by or for the aircraft, when used by certified or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate, or foreign commerce for transporting people or property by air. For the purpose of this subdivision (3), the words “hub operation within this state” shall be construed to have all of the following criteria:

a. There originate from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and

b. Passengers or property, or both, are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(4) During the period beginning December 1, 1997, and ending on the date 20 years thereafter, the amount invested in all new and existing manufacturing facilities in this state by the taxpayer, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory in this state, provided that the taxpayer has met the criteria in paragraph a. below, and, in addition, has met the criteria in paragraph b. below:

a. The taxpayer must, not later than December 31, 2000, file with the department a statement of intent to claim the deduction provided under this section. This statement of intent shall contain any information required by the department.

b. During the period commencing with December 1, 1997, and ending on the date six years thereafter, the amount of new investment in all new and existing manufacturing facilities in this state by the taxpayer and, in addition, the number of new employees at all new and existing manufacturing facilities in this state shall meet or exceed the limits described in one of the following brackets:

No deduction shall be available under this subdivision (4) until the criteria defined in paragraph a. above, and, in addition, paragraph b. above have been met. The deduction available under this subdivision (4) shall only be available during those years within the 20 years after December 1, 1997, in which the taxpayer maintains the criteria defined in paragraph b. above.

(5) The amount invested by the taxpayer in the purchase of an existing manufacturing facility in this state, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory on or after January 1, 1998, and during the period for 20 years thereafter, provided that the taxpayer has met the criteria in paragraphs a., b., and c.

a. The taxpayer must, within six months of February 19, 1998, file with the department a statement of intent to claim the deduction provided pursuant to this subdivision (5). The statement of intent shall contain any information required by the department.

b. At the time of purchase, the existing manufacturing facility must have at least 1,000 employees, which employment level must be maintained during the period 20 years after the date of acquisition by the taxpayer.

c. At the time of purchase, the existing manufacturing facility must produce aluminum alloy can stock.

(6) The balance of any reserve, account, or trust reasonably determined to satisfy any liability that is imposed by federal, state, or local government laws or regulations for reclamation, storage, disposal, decontamination, retirement, or other related costs associated with a plant, facility, mine, or site in Alabama.

(7) The book value of any residential real estate project in Alabama that qualifies for federal or state income tax credits, loans, or grants on the grounds that it provides housing for low-income individuals.

(8) In the case of an Alabama S corporation, an amount equal to 30 percent of the corporation’s taxable income.

(9) In the case of a limited liability entity or a disregarded entity, an amount equal to 30 percent of its taxable income, provided that the deduction provided in this subdivision shall not apply if the shares tax levied by Article 3 is in effect.

(c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from net worth.