HB390 - Alabama Innovation Act Summary

• Establishes the Alabama Innovation Act providing research and development tax credits to Alabama companies for qualified research expenses conducted in-house or through Alabama research entities.

• Tax credit rates are 25 percent for research at Alabama research entities and 10 percent for other qualified research conducted in Alabama, calculated against current year and prior three-year average expenses.

• Limits total annual tax credits to $25,000,000 statewide with no single taxpayer receiving more than 20 percent ($5,000,000) of available credits in any year, allocated on first-come, first-served basis.

• Allows unused credits to be carried forward for up to five years and permits credits to offset income tax or financial institution excise tax liabilities.

• Requires applications to be filed electronically between March 15 and December 31, with the Department of Revenue administering the program and promulgating necessary rules; effective January 1, 2017.