Code of Alabama
Article 1 - General Provisions.
Section 40-18-6.1 - Gain or Loss — Special Rules for Capital Gains Invested in Opportunity Zones.

(a) The provisions in 26 U.S.C. § 1400Z-2 shall be applicable to an investment in an approved opportunity fund in calculating both of the following:
(1) The income tax levied by this chapter, or the estimated income tax payment.
(2) The financial institution excise tax found in Chapter 16.
(b) Any approved opportunity fund may enter into a project agreement with ADECA to provide to the fund's investors impact investment tax credits against any tax liability described in subdivisions (1) and (2) of subsection (a). The impact investment tax credits shall be allocated annually, but only to the extent that one or more projects undertaken by the fund are not producing the returns provided in the project agreement. Provided however, the calculation of the impact investment tax credit does not guarantee a rate of return that is more than the 52-week average yield rate for the United States 10-year Treasury Note from the prior calendar year. The project agreement may authorize the fund to allocate the credits among some or all of the owners in any manner specified, regardless of whether the allocation follows rules similar to 26 U.S.C. § 704(b) and the regulations thereunder. Unused credits may carry forward for five years.
(c) The project agreement shall require an approved opportunity fund to obtain investment from a qualified fund and require that the qualified fund receive a fixed portion of any distributions in excess of the amounts stated in the project agreement.
(d)(1) In no event shall the credits allowed under this section exceed $50 million cumulatively. In no event shall the credits be allocated during the first four years of the existence of the fund, but credits may be allocated in the fifth year to account for inadequate aggregate returns during the first four years. Credits may not be allocated to projects in which an approved opportunity fund has committed to invest prior to August 5, 2019.
(2) The project agreement shall provide that ADECA shall receive regular financial performance information about the fund, and the information shall, at a minimum, include all information provided to other investors in the fund. Prior to claiming the credits provided in subdivision (1), a fund shall submit to ADECA a certification as to the financial performance of the fund or assets which are the subject of the project agreement. ADECA may choose to request other information, and the fund shall comply with such requests. Following the examination as it deems necessary, ADECA may certify the information and deliver the same to the Department of Revenue. Thereafter, the Department of Revenue shall allow the credits in the amount determined by ADECA.
(e) ADECA may charge reasonable fees for its negotiation and entry into project agreements provided herein, and it may charge fees for its financial and oversight audits of the funds. ADECA may retain consultants to assist it with the powers and responsibilities delegated to it herein.
(f) For purposes of this section:
(1) “ADECA” shall mean the Department of Economic and Community Affairs.
(2) An “approved opportunity fund” is a fund which meets all the criteria in Section 41-10-46.01(b)(2).
(3) A “qualified fund” is a fund which meets all the criteria in Section 41-10-46.01(b)(3).
(g) ADECA shall not enter into any project agreements under this section after December 31, 2024.
(h) ADECA shall report to the Legislature in the third year following passage of Act 2019-392, and annually thereafter, on the overall economic activity, usage, and impact to the state from opportunity fund investments for which impact investment tax credits have been allowed. The information in the reports shall be consistent with the information required by the Legislature pursuant to, and shall be provided by ADECA to the Legislature in accordance with, Section 40-1-50, and rules adopted thereunder. Information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10.

Structure Code of Alabama

Code of Alabama

Title 40 - Revenue and Taxation.

Chapter 18 - Income Taxes.

Article 1 - General Provisions.

Section 40-18-1 - Definitions.

Section 40-18-1.1 - Operating Rules.

Section 40-18-2 - Levied; Persons and Subjects Taxable Generally.

Section 40-18-2.1 - Income of Foreign Missionary Exempt.

Section 40-18-3 - Income of Officers or Agents of the United States, Etc.

Section 40-18-4 - Interest or Other Income Received From Obligations of the United States or Its Possessions, Agencies or Instrumentalities.

Section 40-18-5 - Tax on Individuals.

Section 40-18-6 - Gain or Loss - Basis of Property; Adjusted Basis.

Section 40-18-6.1 - Gain or Loss — Special Rules for Capital Gains Invested in Opportunity Zones.

Section 40-18-7 - Gain or Loss - Determination of Amount.

Section 40-18-8 - Gain or Loss - Recognition.

Section 40-18-8.1 - Gain or Loss — Recognition of Gains Invested in Opportunity Zones.

Section 40-18-9 - Gain or Loss - Optional Method for Returning as Income Increases in Redemption Value of Securities Purchased at a Discount.

Section 40-18-11 - Inventory.

Section 40-18-12 - Net Income of Individuals - Defined.

Section 40-18-13 - Computation of Income.

Section 40-18-14 - Adjusted Gross Income of Individuals.

Section 40-18-14.1 - Deferred Compensation Plans.

Section 40-18-14.2 - Adjusted Gross Income.

Section 40-18-14.3 - Gross Income - Discount and Interest.

Section 40-18-15 - Deductions for Individuals Generally.

Section 40-18-15.1 - Net Income Taxable Income Defined - Generally.

Section 40-18-15.2 - Net Operating Loss.

Section 40-18-15.3 - Deductions for Health Insurance Premiums.

Section 40-18-15.4 - Deductions for Certain Retrofitting or Upgrades to Homes - Residence in Alabama Insurance Underwriting Association Zone.

Section 40-18-15.5 - Deductions for Certain Retrofitting or Upgrades to Homes - Residence in Alabama.

Section 40-18-15.6 - Deductions for Contributions Made to Health Savings Accounts.

Section 40-18-15.7 - Optional Increased Standard Deduction for Qualified Persons.

Section 40-18-15.8 - (Effective Until December 31, 2025) Deductions for Contributions to Qualifying Alabama Achieving a Better Life Experience Savings Accounts.

Section 40-18-16 - Depreciation.

Section 40-18-17 - Items Not Deductible.

Section 40-18-18 - Amortization of War or Emergency Facilities.

Section 40-18-19 - Exemptions - Generally.

Section 40-18-19.1 - Exemptions for Severance, Unemployment Compensation, Etc.

Section 40-18-19.2 - Exemption of Certain Death Benefit Payments for Peace Officer or Fireman Killed in Line of Duty.

Section 40-18-20 - Exemptions - Military Retirement Benefits.

Section 40-18-21 - Credits for Taxes Paid on Income From Sources Outside the State and for Job Development Fees.

Section 40-18-21.1 - Annual Report of Credits Claimed for Taxes Paid to Foreign Countries.

Section 40-18-22 - Taxpayers Engaged in Multistate Business - Allocation and Apportionment of Deductions and Exemptions.

Section 40-18-23 - Taxpayers Engaged in Multistate Business - Option of Certain Taxpayers to Report and Pay Tax on Basis of Percentage of Volume.

Section 40-18-24 - Taxation of Subchapter K Entity.

Section 40-18-24.1 - Composite Return and Payment by Nonresident Owner of Subchapter K Entity.

Section 40-18-24.2 - Taxation of Pass-Through Entities.

Section 40-18-24.3 - Taxation on Distributive Share of Interest, Dividends, etc., of Nonresident Member of Qualified Investment Partnership.

Section 40-18-24.4 - Alabama Electing Pass — Through Entity Tax Act.

Section 40-18-24.5 - Refundable Credit for Certain Owners, Members, Partners, or Shareholders of Electing Pass-Through Entities.

Section 40-18-25 - Estates and Trusts.

Section 40-18-25.1 - Estates and Trusts - Exemptions.

Section 40-18-25.2 - Estates and Trusts - Deductions From Gross Income of Net Operating Loss.

Section 40-18-26 - Information From Source of Income.

Section 40-18-27 - Individual Taxpayer's Returns; Liability of Innocent Spouse.

Section 40-18-28 - Returns of Subchapter K Entities and Single Member Limited Liability Companies.

Section 40-18-29 - Fiduciary Returns.

Section 40-18-30 - Return When Accounting Period Changes.

Section 40-18-31 - Corporate Income Tax - Generally.

Section 40-18-31.1 - Election for Foreign Corporations to Classify Dividend Income From Certain Subsidiaries as Business or Nonbusiness Income.

Section 40-18-31.2 - Factor Presence Nexus Standard for Business Activity.

Section 40-18-32 - Corporate Income Tax - Exemptions.

Section 40-18-33 - Corporate Income Tax - Taxable Income.

Section 40-18-34 - Additions Required by Corporations.

Section 40-18-35 - Deductions Allowed to Corporations.

Section 40-18-35.1 - Carry Forward of Net Operating Losses.

Section 40-18-35.2 - Deductions From Federal Taxable for Amounts Included in Income Under 26 u.s.c. § 951a, Etc.

Section 40-18-35.3 - Deductions From Federal Taxable for Amounts Included in Income Under 26 u.s.c. § 118(b)(2).

Section 40-18-36 - Distributions by Corporations.

Section 40-18-37 - Items Not Deductible by Corporations.

Section 40-18-38 - Additional Deductions Allowed for Corporations; Credits.

Section 40-18-39 - Corporate Returns.

Section 40-18-39.1 - Business Interest Expense Deduction Limitations.

Section 40-18-40 - Tax to Be Reported on Forms; Department May Assess Additional Tax Penalty or Interest.

Section 40-18-41 - Amortization of Ad Valorem Tax.

Section 40-18-42 - Time and Methods of Payment of Tax.

Section 40-18-42.1 - Revised Due Dates for Payments of Income Tax or Financial Institution Excise Tax.

Section 40-18-44 - Installment Method.

Section 40-18-50 - Penalty for Failure to Make Return Within Time Specified.

Section 40-18-51 - Applicability of Lien Provisions; Disposition of Collections; Collection Prior to Delinquency.

Section 40-18-53 - Inspection of Returns by Federal or Foreign State Agents.

Section 40-18-54 - Supervision of Assessment and Collection.

Section 40-18-55 - Statement to Be Furnished by Taxpayer.

Section 40-18-56 - Furnishing Sworn Statement of Annual Return of Income to Department; Penalties for Failure to Comply; Limitations on Inspection of Taxpayer's Records.

Section 40-18-57 - Rules to Be Promulgated by Department of Revenue.

Section 40-18-58 - Appropriation.

Section 40-18-59 - Additional Appropriations.

Section 40-18-60 - Covid-19 Recovery Capital Credit Protection Act of 2021.

Section 40-18-61 - Restaurant Revitalization Grant Monies.