The Growing Alabama Act Income Tax Credit was established to generate funding to help local economic development organizations develop building sites in order to attract business or industry to an area.
- Allows taxpayers to make cash contributions to a local economic development organizations which has been approved by the Renewal of Alabama Commission and receive a credit which can be applied against Chapter 18 taxes.
- Taxpayers will reserve their portion of any remaining available tax credit using an online portal system (M.A.T.) administered by the Alabama Department of Revenue similar to the SGO credit reservation system
Requirements for Growing Alabama Credit
- In order to be eligible to receive funding, a local economic development organization must first apply to the Department of Commerce for funding.
- The application must include confirmation that there has been expressed interest from industry in a building site and a description of the infrastructure work needed to make the site acceptable to the industry or business.
- Application should also include quotes for the completion of such site preparation work.
- Application should include an estimate of the number of jobs created, the average wages paid, and the capital investment undertaken by the interested industry or business if the potential site were utilized.
- If approved, the Department of Commerce will forward the application to the Alabama Renewal Commission. The Renewal Commission will consider the application further and if approved, shall specify the amount of money a local economic development agency may receive for completing the necessary site work in order to attract an interested industry or business to the area.
Requirements for claiming a Growing Alabama Credit
- Taxpayers, using ADOR’s online registration system, will reserve a contribution amount to a local economic development organization, but not in excess of the amount approved by the Renewal Commission for such organization.
- A taxpayers credit for their donation cannot be in excess of 50% of their income tax liability.
- Any unused credit may be carried forward up to a maximum of 5 years.
- Growing Alabama Credit contributions for local economic development organizations are capped at $5,000,000 for the 2016 fiscal year and $10,000,000 for the fiscal years 2017, 2018, 2019, and 2020.
- Contributions may only be claimed by the donating individual or corporate entity and may not be transferred to any other taxpayer.
- A taxpayer may not claim credit for a donation made by any other entity including an entity taxed under subchapter S or subchapter K of which the taxpayer is an owner, shareholder, partner, or member.
- Taxpayers may not take a separate itemized deduction in addition to the Growing Alabama Credit for any contribution made under this program to a local economic development organization.
- Upon receipt of funding provided by the Growing Alabama Credit, the local economic development organization may proceed with site preparation work as specified in their application to the Department of Commerce.
- The Growing Alabama Act Income Tax Credit will sunset in 2020.
- Repeal shall not cause a reduction or suspension of any credits awarded for fiscal year 2020 or prior, including carryforwards for years during which the Growing Alabama Credit was in effect.