Alabama House Bill HB439

Alabama 2023 Regular Session

• Introduced: 5/4/23
• Refer: 5/4/23
• Report Pass: 5/10/23
• Engrossed: 5/16/23
• Refer: 5/16/23
• Report Pass: 5/17/23
• Enrolled: 5/25/23
• Passed: 5/25/23

Caption

Relating to the Growing Alabama Credit; to add Section 40-18-417.8 to the Code of Alabama 1975; to provide that the credit from a parent or holding company may be claimed by the subsidiary in certain circumstances; and to provide retroactive effect.

Impact

The introduction of this bill is expected to enhance the financial structure for businesses in Alabama by allowing more efficient usage of available tax credits. By enabling subsidiaries to directly claim these credits, it fosters an environment that supports business growth and economic development. The retroactive effect of the bill suggests a willingness to address prior taxation issues, thus promoting fairness for businesses that may have missed out on applicable credits under the previous tax code.

Summary

House Bill 439 pertains to the Growing Alabama Credit, specifically addressing the manner in which credit can be claimed by subsidiaries of parent or holding companies. By adding Section 40-18-417.8 to the Code of Alabama 1975, the bill allows subsidiaries to claim the tax credit provided both the parent or holding company and the subsidiary are filing as part of an Alabama consolidated tax return. This provision brings clarity and flexibility to Alabama’s taxation system, potentially benefiting companies operating under various corporate structures.

Sentiment

Overall, the sentiment around HB 439 appears to be positive, particularly from the business community, as it simplifies processes and offers further opportunities for tax relief. Supporters argue that this legislation will incentivize business investments in Alabama, while critics of similar measures may raise concerns about potential loss of state revenue. However, with local economic interests in mind, the bill seems to have garnered broad support among legislators, as indicated by its unanimous passage in the Senate.

Contention

While HB 439 has received general support, some points of contention may arise regarding the long-term fiscal implications of allowing subsidiaries to claim credits. Questions could be raised about the adequacy of oversight on how these credits are distributed and claimed, as well as concerns about maintaining a healthy balance in state revenue generation versus providing tax relief. Nevertheless, the clear legislative intent appears to be one of fostering a favorable business climate in Alabama.