PROCEDURES FOR RESERVING A GROWING ALABAMA CREDIT
Eligible donors may reserve a Growing Alabama Credit for contributions made to an Economic Development Organization (EDO) for an approved qualifying project. Reservations are made online through My Alabama Taxes (MAT) and are on a first-come, first-served basis, subject to verification by the EDO confirming that: the contribution has been received, the project has been funded in accordance with the applicable Growing Alabama Funding Agreement, and the project will be undertaken.
Important Dates to Remember
Procedures for Eligible Donors
Prerequisite for reserving a Growing Alabama Credit for an approved qualifying project:
- Donors must have a My Alabama Taxes (MAT) account to reserve the credit through ALDOR’s online reservation system.
Procedures for making an online credit reservation through MAT:
Part I – Make a Donation
- Log in to My Alabama Taxes using your login credentials.
- Once logged in, navigate to the appropriate tax account for the taxing entity:
- For corporations, navigate to the Business Income Tax account. If the corporation is a public utility, then navigate to Utility 2.2 Gross Receipts License Tax account.
- For S corps, LLCs, and partnerships, navigate to the Pass-Through Entity account. If the entity is a public utility, then navigate to Utility 2.2 Gross Receipts License Tax account.
- For individuals, navigate to the Individual Income Tax account
- For financial institutions, navigate to Financial Institution Excise Tax account.
- For insurance companies, navigate to the Business Privilege Tax or Withholding
- Under the appropriate Account, click on ‘Report a donation to an Economic Development Organization’ and complete the required fields as follows:
- Under ‘Donor Information,’ enter the donor’s contact information and address.
- Under ‘EDO Donation Information,’ click on the project for which you wish to make the credit reservation.
- Donation amount – Enter the amount of credit you are reserving.
- For utility companies that choose “Utility 2.2 Gross Receipts License Tax” account, click ‘Yes’ or ‘No’ to the question, ‘Would you like to allocate a portion of your donation to your 2.2% License Tax?’
- If you choose Yes, enter the amount of credit to be allocated against income tax and/or 2.2 utility gross receipts license tax at the time of the donation reservation. Please be advised that this allocation is irreversible once made.
- Donation date – Enter the date the reservation is made. Please note that the donor has 21 days from this date to make the cash contribution to the EDO. Any donation that is not confirmed by the EDO on the date the online project reservation is closed will be denied.
Part II – Review Submission
The donor must agree to the terms and rules of the donation by checking the box before the donation can be submitted. The terms and rules include the following:
- The donor has 21 days from the date of the online credit reservation to make a cash donation to the EDO for the approved project.
- The EDO has 60 days from the date the project is added to the online system to confirm that the taxpayer’s donation has been received, the project has been funded, and the project will be undertaken.
- In the event the taxpayer’s donation is greater than the amount of the reservation, the credit is limited to the amount of the reservation available for the project.
- The credit is only available to the donating taxpayer making the donation. For pass-through entities, the credit may pass through to owners of the pass-through entity.
- The donor acknowledges the disclosure requirements under Section 41-29-3, Code of Alabama, and shall disclose the amount of the Growing Alabama Credit received and the realized benefits to the Secretary of Commerce. The information provided shall subsequently be included in the Department of Commerce’s reporting requirements under Section 40-1-50, Code of Alabama.
What to expect after the online credit reservation is submitted through My Alabama Taxes (MAT):
- The donor will receive a confirmation number acknowledging the receipt of the reservation.
- The donor will receive a subsequent web notice from MAT notifying whether their donation has been approved or denied by the EDO.
- The donor will receive a letter from the Department of Revenue confirming their Growing Alabama Credit if the EDO confirms via ALDOR’s online system that the donation has been received, the project has been funded, and the project will be undertaken.
Procedures for Economic Development Organizations
An Economic Development Organization (EDO) must have a My Alabama Taxes (MAT) account before the Alabama Department of Revenue (ALDOR) can add the EDO’s approved project in the online reservation system. Once ALDOR opens the online reservation for the EDO project, the EDO will receive a web notice notifying them that the online reservation is open and available to the donors willing to make contributions through the online reservation system.
Steps required to be taken by the EDO:
- Create a MAT account so that ALDOR can open the online project reservation to receive donations.
- The EDO has 60 days from the date the project is added to the online system to confirm that the taxpayer’s donation has been received, the project has been funded, and the project will be undertaken. The project will close 60 days from the date the project is added to the online system. Any reservations that have not been confirmed before the online reservation closes will automatically be denied.
To approve/deny the donation reservations, please follow the steps below:
- Log in to My Alabama Taxes using your login credentials.
- Once logged in, click on the “Verify EDO donations/confirm project” link under Correspondence in the Accounts tab
- Read and Accept the disclaimer shown in the next window and click Next.
- Approve/deny donations by checking the appropriate boxes, and then confirm the information provided on the screen.
- Review and submit.
Please be advised that it is the responsibility of the EDO to comply with the above steps as provided in the Growing Alabama Funding Agreement. If you have further questions, please contact the Office of Economic Development.