SB247 Summary

• Creates a research and development tax credit against state income taxes and financial institution excise taxes for qualified research expenses incurred within Alabama, mirroring the federal R&D tax credit.

• Provides a 6.5% tax credit for qualified research expenses (QRE) incurred in-state, increasing to 15% if research is conducted through a university research contract with an Alabama chartered university offering graduate programs.

• Extends tax credit eligibility to businesses, financial institutions, and pass-through entities (S corporations, partnerships, limited liability companies, trusts, and estates), with credits flowing through to respective shareholders, partners, members, owners, or beneficiaries.

• Limits credits to the tax year when the taxpayer qualifies, makes credits non-refundable, and allows unused credits to be carried forward for up to 10 years; all other state income tax credits must be applied before this credit.

• Becomes effective on the first day of the third month following passage and approval by the Governor.