HB478 Summary

• Authorizes the Alabama Development Office and Department of Revenue to recommend companies and educational institutions for state income tax withholding incentives if they undertake qualifying new, expansion, or retention projects in Alabama.

• Approved entities may retain 1-90 percent of state income taxes withheld from eligible employees for new or expansion projects, or 1-75 percent for retention projects, with incentive periods not exceeding 20 years.

• Requires minimum capital costs of $2,000,000 for projects outside favored geographic areas or $500,000 in favored areas; eligible employees must work at least 36 hours per week with workday fully dedicated to the qualifying project.

• Aggregate withholding incentives and capital credits cannot exceed 100 percent of the project's capital costs; employees receive a tax credit equal to 100 percent of withholding incentives retained by the employer.

• Establishes oversight through quarterly certifications to the Department of Revenue and verification by the Department of Industrial Relations, with authority to audit approved entities for compliance.